Nvidia’s $590 Billion DeepSeek Rout Is Largest in Market History

Posted: Jan 27, 2025

$NVDA (Nvidia Corp.) experienced a significant stock drop of 17%, causing a $589 billion loss in market capitalization.
Nvidia’s drop led to a broader selloff in technology stocks due to concerns about Chinese AI startup DeepSeek offering comparable performance at a lower cost.
The rise of DeepSeek and its AI model has raised concerns about disrupting the current AI business model that relies on high-end chips and computing power.
US companies like Meta and OpenAI are increasing investments in AI projects, which Nvidia has traditionally benefited from, but investors may start demanding better returns.
Despite US restrictions on exporting advanced semiconductor technologies to China, DeepSeek’s progress suggests Chinese AI engineers are finding ways to work around these bans.
Nvidia released a statement indicating that DeepSeek’s model is an "excellent AI advancement" and did not violate US restrictions, but noted that running AI models still requires Nvidia GPUs.- Global selloff of tech stocks due to emergence of low-cost Chinese AI model
Nvidia (NVDA) loses about $593 billion in market value
Chinese startup DeepSeek launches free AI assistant, overtaking U.S. rival ChatGPT
Nasdaq drops 3.1%, led by Nvidia's record one-day loss
Other companies affected include Broadcom Inc (AVGO), Microsoft (MSFT), and Alphabet (GOOGL)
Philadelphia semiconductor index falls 9.2%, Marvell Technology (MRVL) tumbles 19.1%
SoftBank (9984.T) and ASML (ASML.AS) decline
DeepSeek's AI model threatens traditional AI giants like Nvidia, Meta Platforms (META), and Alphabet's Gemini
Investors sell off tech shares and power utilities on fears of AI disruption
Nvidia stock falls 11.8% for the year, rose 171% in 2024, and 239% in 2023
Vertiv Holdings (VRT) and power utility stocks experience sharp declines

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