DeepSeek Triggers Global AI Selloff, Nvidia Loses $593 Billion (5,13,12,00,38,18,200 Rupees) in Market Value
New Delhi (The Uttam Hindu): Investors worldwide sold off technology stocks on Monday following the emergence of DeepSeek, a Chinese AI model that offers low-cost solutions and challenges established leaders like Nvidia. This led to a sharp decline in the tech-heavy Nasdaq which fell 3.1%, with Nvidia suffering the most significant blow. The company’s shares tumbled nearly 17% wiping out $592.7 billion in market value, marking the largest one-day market capitalization loss in Wall Street history. Other major players like Broadcom, Microsoft and Alphabet also faced significant losses, while the Philadelphia Semiconductor Index recorded its steepest drop since March 2020.
DeepSeek’s AI assistant has created waves in the industry by surpassing ChatGPT in downloads on Apple’s app store within days of its release. Utilizing Nvidia's lower-capability H800 chips, DeepSeek's models are reportedly 20 to 50 times cheaper to use than existing alternatives with training costs of under $6 million. This cost-efficiency has sparked concerns about reduced demand for chips, data centers and power infrastructure traditionally needed for high-performance AI models. Silicon Valley venture capitalist Marc Andreessen hailed DeepSeek's breakthrough as a "Sputnik moment," signaling a transformative shift in AI development.
Despite the panic, some analysts view the selloff as an overreaction, noting that DeepSeek's mobile and PC-focused AI applications do not directly compete with Nvidia's dominance in data center technology. The decline has presented opportunities for investors to acquire high-quality tech stocks at lower valuations. Nvidia’s shares ended at $118.42 on Monday and while the company remains down 11.8% year-to-date, its rapid growth in recent years highlights its pivotal role in the AI ecosystem. However, the broader implications of DeepSeek's breakthrough remain to be seen as it signals a shift toward more accessible AI solutions that could reshape the global tech landscape.
