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
Stay ahead of the market with AI stock alerts & AI summaries of the latest earnings, stock ideas for free with Fluid Bot. Sign up now!