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Nvidia CEO Jensen Huang showcased a Blackwell GeForce RTX 50 Series GPU alongside an RTX 5000 laptop during his keynote at the Consumer Electronics Show (CES) in Las Vegas on January 6, 2025.
Nvidia experienced a staggering loss close to $600 billion in market capitalization on Monday, marking the most significant decline for any company in a single day in U.S. history.
The stock fell by 17%, closing at $118.58, representing Nvidia’s most significant market downturn since March 16, 2020, at the onset of the COVID-19 pandemic. This drop followed a brief period during which Nvidia had surpassed Apple to become the most valuable publicly traded company, a status that was briefly overshadowed by the 3.1% decline in the tech-heavy Nasdaq index on Monday.
This sharp selloff was ignited by rising concerns over competition from Chinese artificial intelligence lab DeepSeek, which recently revealed a free, open-source large language model. The lab claimed that this model was developed in just two months at a cost of under $6 million, utilizing Nvidia’s lower-capability H800 chips.
Nvidia’s graphics processing units (GPUs) are currently the predominant choice for AI data center chips in the U.S., with major tech companies like Alphabet, Meta, and Amazon investing heavily in these processors to train and implement their AI models. Analysts at Cantor expressed in a report that the launch of DeepSeek’s new technology has generated substantial anxiety regarding its potential impact on compute demand, raising fears of peak spending on GPUs.
Despite these concerns, the same analysts, who are positive about Nvidia’s stock, suggested that predictions of reduced demand are misguided, asserting that advancements in AI will likely lead to increased need for computational resources, not a decline.
Nonetheless, given Nvidia’s incredible stock performance lately—239% increase in 2023 alone—investors are wary of any signs of decreased spending. Similarly, Broadcom, another significant player in the chip industry, also faced substantial losses, dropping 17% and losing $200 billion in market capitalization on the same day.
Other companies reliant on Nvidia’s GPUs, such as Dell, Hewlett Packard Enterprise, and Super Micro Computer, experienced significant stock selloffs, with drops of at least 5.8%. Oracle, involved in President Donald Trump’s latest AI initiative, saw its stocks plunge by 14%.
Nvidia’s recent market cap loss of $600 billion far exceeded the previous record of $279 billion it set in September, and marked a noticeable increase over the $232 billion loss Meta experienced in 2022. Prior to these losses, Apple’s decline of $182 billion in 2020 held the record.
The scale of Nvidia’s decline is astonishing, amounting to more than twice the market capitalizations of Coca-Cola and Chevron, and surpassing the total values of both Oracle and Netflix.
Jensen Huang’s personal fortune was notably affected, with his net worth decreasing by approximately $21 billion, according to Forbes’ real-time billionaires list. This movement positioned Huang as the 17th richest person globally.
The sudden interest surrounding DeepSeek’s technology led to its app overtaking OpenAI’s ChatGPT as the most downloaded free application on the Apple App Store in the U.S. This development comes even amidst recent restrictions on U.S. chip exports to China.
Venture capitalist David Sacks, appointed by Trump to focus on AI and cryptocurrency, remarked on X that DeepSeek’s model demonstrates the escalating competitiveness of the AI landscape. He further commented on the decision by Trump to reverse President Biden’s executive order regarding AI safety.
Sacks expressed confidence in the U.S. position in the AI race while also stressing the importance of vigilance against complacency.
Nvidia now ranks as the third most valuable public company, trailing behind Apple and Microsoft.
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