Nvidia Suffers Historic $465 Billion Loss Due to DeepSeek Concerns
Nvidia Corp. experienced a massive drop in market value on Monday, losing a record $465 billion following investor fears about the rising Chinese AI startup, DeepSeek. The drop saw Nvidia’s shares plummet by as much as 13%, surpassing the previous record loss of $279 billion in September when the stock fell by 9%.
The sharp decline in Nvidia’s stock value had a broader impact, triggering a wider market selloff. Nvidia’s large presence in key indexes caused the S&P 500 to fall by up to 2.3%, while the Nasdaq 100 dropped as much as 3.6%. Nvidia’s previous downturns have contributed to seven of the top ten biggest one-day losses in the S&P 500 based on market value, according to Bloomberg data.
The semiconductor giant’s plunge comes amid growing concerns over DeepSeek’s low-cost AI model, which is perceived as a serious competitor to established U.S. companies like OpenAI and Meta Platforms Inc. DeepSeek’s AI technology, launched last week, is being touted as offering similar performance to Western chatbots but at a significantly lower price. The open-sourced AI platform, founded by Liang Wenfeng of a quant fund, has quickly risen to the top of Apple Inc.’s App Store rankings.
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Analysts at Jefferies noted that DeepSeek’s technology could disrupt the current AI business model, which heavily depends on high-end chips and extensive computing power. This development raises doubts about the sustainability of the huge investments made by U.S. companies in AI.
Nvidia has benefited the most from the surge in AI spending, as its semiconductors are integral to AI technology. However, concerns are now growing about whether investors will continue to back companies spending heavily on AI without immediate returns.
Meta’s announcement on Friday to significantly increase its capital expenditures on AI projects to $65 billion this year, alongside the launch of a $100 billion venture involving OpenAI, SoftBank, and Oracle to build AI infrastructure across the U.S., has further heightened these concerns.
Meanwhile, the U.S. has imposed restrictions on the export of advanced semiconductor technologies to China in an effort to curb the country’s progress in AI. However, DeepSeek’s rapid advancement suggests that Chinese engineers have managed to overcome these barriers, focusing on efficiency despite limited resources.
Amelia is a senior writer at Blockiance, focusing on the cultural implications of NFTs and digital ownership. Holding a master’s in media studies, she combines her academic background with a passion for storytelling to explore how Web3 technologies reshape creative industries.
