---
title: ⚡ The Jevons paradox
description: "🚨 In the wake of DeepSeek turning the entire industry on its head — and wiping nearly $600 billion off of the market cap of Nvidia in a single day — one new phrase has become table stakes for anyone wading into the DeepSeek discourse: Jevons Paradox, with traffic to its associated Wikipedia page soaring this week. \n\n👉 Per that very Wikipedia page:\n“...the Jevons paradox occurs when technological advancements make a resource more efficient to use (thereby reducing the amount needed for a single application), however, as the cost of using the resource drops, overall demand increases causing total resource consumption to rise.”\n\n👉 The original example posited by Mr. William Stanley Jevons, summarized nicely by Axios, was coal. Progress in steam engines, which enabled them to use less coal, didn’t lead to a drop in coal demand — it led to a huge rise.\n\nThough a bit of an oversimplification, that is essentially the crux of the current debate in AI: DeepSeek reportedly achieved something for a lot less money and resources than US competitors like OpenAI and Meta used. That could be interpreted in two ways:\n• We will therefore need fewer high-tech chips like the ones Nvidia makes, and fewer energy plants to power them (which is why power and datacenter stocks got hammered this week);\n• Or, and this is where the Jevons Paradox comes in, WE WILL WANT EVEN MORE 💪 \n\nThe market seemed to follow the first school of thought on Monday 🐻 , but came around to the second by Tuesday 🐮 , with chip analysts and tech heavyweights, most notably Microsoft’s CEO Satya Nadella, citing the paradox as proof that AI use will “skyrocket.” 🚀 🚀 🚀 \n\nSource: Chartr"
---

[Syz The Moment](https://blog.syzgroup.com/syz-the-moment)

# [⚡ The Jevons paradox](https://blog.syzgroup.com/syz-the-moment/⚡-the-jevons-paradox-by-chartr)

 Written by [Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/syz-the-moment/author/charles-henry-monchau) | Jan 30, 2025, 1:27:25 PM

[View full post](https://blog.syzgroup.com/syz-the-moment/⚡-the-jevons-paradox-by-chartr)

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