According to The New York Times, the plunge is related to the Chinese startup’s success in proving it can build and train advanced AI models without relying on Nvidia’s Graphics Processing Units (GPUs), challenging the American company’s leadership in the market.
Nvidia lost $589 billion in market capitalization yesterday after DeepSeek released its latest AI model and gained popularity in the U.S. market. The Chinese startup demonstrated that it can build powerful AI models without relying on Nvidia’s GPUs, posing a challenge to Nvidia’s leadership in the AI market. The American company’s valuation dropped from $3.5 trillion to $2.9 trillion.
Last year, Nvidia’s shares soared as it capitalized on the AI wave, developing hardware for cutting-edge AI technology and climbing to the top ranks among the world’s most powerful companies. While its shares had already declined by August after its impressive growth in the previous months, the recent drop has been particularly alarming—marking its worst day since the pandemic-driven sell-off in 2020. According to Forbes, this loss represents “the biggest market loss in history” for a company in a single day, as Nvidia lost a total of $589 billion in market capitalization yesterday. Nvidia lost its position as the most valuable company in the world, with its valuation dropping from $3.5 trillion to $2.9 trillion, falling below Microsoft and Apple. Nvidia controls 90% of the AI chip market, powering OpenAI’s ChatGPT since 2022, and increasing its revenue above 200% in the past few years, but now DeepSeek’s breakthrough has raised concerns about the future of the company. Just a few days ago, Nvidia’s CEO Jensen Huang introduced new chips and technologies at the Consumer Electronics Show (CES) in Las Vegas.
