Nvidia's Historic Stock Plunge Amid DeepSeek Competition
Nvidia experienced its worst single-day stock performance in history on Monday, January 27, 2025, shedding nearly $600 billion in market value. The dramatic plunge, which saw shares drop 17%, was triggered by concerns over competition from Chinese AI company DeepSeek. DeepSeek, which developed a ChatGPT rival at a fraction of the cost of U.S. counterparts, reportedly spent just $5.6 million on Nvidia’s graphics processing units (GPUs) to train its AI model. This raised questions about the sustainability of Nvidia’s dominance in the AI chip market, as U.S. tech giants like Meta, Tesla, and OpenAI have heavily relied on Nvidia’s expensive GPUs for AI development.
The sell-off knocked Nvidia from its position as the world’s most valuable company, reducing its valuation from $3.5 trillion to $2.9 trillion. The broader tech sector also suffered, with the Nasdaq dropping 3.1% and the S&P 500 falling 1.5%. Other major AI-related companies, including Arm, Broadcom, and Oracle, saw their shares decline by at least 10%. Nvidia CEO Jensen Huang’s net worth also took a hit, dropping by $21 billion to $103.1 billion.
Despite the market turmoil, Nvidia acknowledged DeepSeek’s advancements as “excellent” and compliant with export controls, while emphasizing that AI inference still requires significant numbers of its GPUs. Analysts, however, expressed concerns that DeepSeek’s low-cost model could disrupt Nvidia’s growth trajectory, as U.S. companies may seek to replicate its efficiency. The event marked the largest single-day market cap loss in history, surpassing Nvidia’s previous record of $279 billion in September 2024.
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DeepSeek Billionaire Rout: Nvidia’s Huang And Oracle’s Ellison Lose Combined $48 Billion
Oracle chairman Larry Ellison and Nvidia CEO Jensen Huang lost tens of billions on paper as shares of their AI-focused companies suffered as DeepSeek
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Why Nvidia stock dip after DeepSeek launch is a healthy market correction | The National
US chip maker dropped 17% on Monday, wiping out more than $590bn in market value
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Prediction: Nvidia Will Soar in 2025 Thanks to This 1 Thing | The Motley Fool
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Nvidia, Broadcom Among Tech Stocks to Sink on DeepSeek Threat
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Nvidia shares sink as Chinese AI app DeepSeek spooks US markets
Share prices in US and European firms fall as the Chinese technology threatens to disrupt the AI industry.
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