US chip giant Nvidia suffered a record wipeout on Monday after Chinese startup DeepSeek upended the tech sector — and the rout cost its CEO Jensen Huang more than $20 billion in a single day.
DeepSeek said it built its new AI model in just two months for less than $6 million – a fraction of the training costs of its US rivals – and without access to Nvidia’s powerful, pricey computer chips, which are subject to the US government’s export controls.
Shares of Nvidia plunged nearly 17% as the market reckoned with the possibility that the world’s largest supplier of AI chips could face less demand as models get more efficient.
The selloff erased a whopping $589 billion off Nvidia’s market capitalization – the largest single-day company decline in the history of the US stock market, according to Bloomberg. Nvidia already held the record after a 9% last September caused $279 billion in value to evaporate.
Nvidia downplayed the risk to its business in a statement, calling DeepSeek an “excellent AI advancement” and noting that its products were still essential for running AI models.
“DeepSeek’s work illustrates how new models can be created using that technique, leveraging widely-available models and compute that is fully export control compliant,” Nvidia said in a statement. “Inference requires significant numbers of NVIDIA GPUs and high-performance networking.”
Huang’s personal net worth also took a major hit, plunging $20.8 billion to $103.6 billion – a decline of more than 16% since the start of the day, according to Forbes.
Other major AI players also got battered in the selloff. The tech-heavy Nasdaq index slid 3.1% or 612 points.
Google parent Alphabet, which has invested heavily in AI development under CEO Sundar Pichai, finished about 4% lower, losing the equivalent of roughly $99 billion in market value.
Microsoft, which has poured billions into Sam Altman’s OpenAI, was down 2.14% or about $71 billion in value. Amazon and Meta shares finished slighter higher.
Shares of AI cloud computing giant Oracle, founded by billionaire Larry Ellison, sank nearly 14%, wiping out nearly $71 billion in value. Ellison suffered an even steeper a loss than Huang on the day, with $27.6 billion wiped from his fortune — bringing it down to $200.5 billion, according to Forbes.
Broadcom, another major US chip supplier, plunged 17% and lost more than $195 billion in value.
Elon Musk-led Tesla, which has close ties to Nvidia and is integrating AI across its product lineup, fell 2.3% — the equivalent of more than $30 billion in value. Musk’s personal fortune was down more than $5 billion to $417.4 billion, though he still ranks as the richest person in the world.
Constellation Energy, a nuclear power plant operator, sank more than 20% on fears that AI would guzzle less energy than necessary going forward, erasing some $23 billion in value. Electricity generator Vistra Corp fell 28% or $18 billion in value.
Credit: Source link
