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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