Nvidia Loses $600 Billion as China’s DeepSeek Sparks Market Shake-Up

New York, United States: Nvidia, a leading US chip-maker, experienced a historic market loss on Monday, with shares tumbling nearly 17% and wiping out $600 billion in market value. The sharp decline came after the introduction of DeepSeek, a low-cost Chinese generative AI model, which threatens to disrupt the global dominance of American tech firms.

DeepSeek, developed by a startup based in Hangzhou, China, has reportedly created an AI chatbot capable of matching the performance of US models for a fraction of the cost. The startup claims to have spent just $5.6 million on its development, a stark contrast to the billions invested by companies like Nvidia.

The news sent shockwaves across the tech sector, causing the Nasdaq index to fall more than 3% by the close of trading. Nvidia’s semiconductor technology, which powers much of the AI industry, was particularly affected. Kathleen Brooks, Research Director at trading platform XTB, remarked, “The focus is now on whether China can do it better, quicker, and more cost-effectively than the US, and if they could win the AI race.”

Other tech giants also faced steep losses. Broadcom’s shares dropped 17.4%, while Dutch semiconductor firm ASML saw a 6.7% decline. Even energy companies, such as Constellation Energy, which has plans to expand AI energy infrastructure, sank by over 20%.

DeepSeek’s Market Impact DeepSeek’s chatbot has already become the top-rated free app on Apple’s US App Store. However, the company has faced significant challenges, including large-scale cyberattacks that forced it to temporarily limit new user registrations. Despite these hurdles, DeepSeek’s emergence underscores China’s growing influence in the AI space.

Art Hogan, Chief Market Strategist at B. Riley Wealth, highlighted the market’s uncertainty, stating, “Everyone is trying to figure out: ‘Can it be believed?’ and ‘What does it mean?’”

Broader Economic Concerns The turmoil in tech stocks coincides with other global economic challenges, including upcoming interest rate decisions by the US Federal Reserve and European Central Bank. Additionally, geopolitical tensions are adding to market volatility. President Trump recently announced a $500 billion initiative to bolster AI infrastructure in the US, led by SoftBank and OpenAI. Despite these efforts, the emergence of DeepSeek serves as a stark reminder of the global race for AI supremacy.

Market Recap

• Nasdaq: Down 3.1% to 19,341.83

• S&P 500: Down 1.5% to 6,012.28

• Dow Jones: Up 0.7% to 44,713.58

• FTSE 100: Flat at 8,503.71

• Brent Crude: Down 1.8% to $77.08 per barrel

With tech giants like Meta and Microsoft set to report earnings this week, the industry will closely watch their responses to DeepSeek’s disruptive entry into the AI landscape.