Jan 28 Tuesday, 2025: The emergence of DeepSeek, a Chinese artificial intelligence firm has sent shock waves through the tech industry over the globe. A significant decline is seen in the stocks of major US tech companies, including Nvidia.
The tech giant has suffered a record $593 billion loss in market value. As of Today, the launch of DeepSeek’s cost-effective AI assistants led to the reevaluation of the AI landscape. Investors are questioning the US tech firm’s dominance in the industry. This change has sparked concerns about the potential disruption to the global stock markets, with Nasdaq experiencing a 3.1% drop.
The development has been described as a “wake-up call” for US tech companies, with President Donald Trump stating that it should serve as a reminder for the industry to be “laser-focused on competing to win”.
DeepSeek’s AI model, which was developed at a fraction of the cost of its rivals, has been able to rival the capabilities of top AI models, including OpenAI’s ChatGPT. This is raising concerns about the valuation hype of US tech stocks.
The company’s use of less advanced Nvidia chips, H800s, for its LLM training has also sparked fears that the huge investments into AI by US firms may be unwarranted, leading to a sharp decline in the value of US and European tech stocks.
Nvidia’s shares plunged by 17% on Monday, wiping out $593 billion in market capitalization, the largest intraday decline in history. Other AI-related stocks, including Microsoft and Meta, also experienced significant declines.
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