Finance & BusinessTech

Nvidia Faces $589 Billion Loss in Market Cap Amid DeepSeek AI Shakeup

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NVIDIA HQ

Shares of Nvidia experienced a sharp 17% drop on Monday, marking its worst single-day loss since the start of the COVID-19 pandemic in March 2020.

The plunge wiped out a staggering $589 billion in market value, setting a record for the biggest one-day loss in history, surpassing Nvidia’s own previous record from September 2024.

DeepSeek’s AI Model Shakes Confidence

The dramatic loss came after the release of DeepSeek, a Chinese AI company’s rival to ChatGPT, which raised doubts about the U.S.’s dominance in generative AI.

DeepSeek reportedly spent just $5.6 million on Nvidia’s graphics processing units (GPUs) to develop its advanced large-language model, challenging Nvidia’s core business model.

While Nvidia’s GPUs are in high demand for AI development, if U.S. tech giants like Meta or Tesla start using more affordable alternatives from DeepSeek, it could hurt Nvidia’s profits.

Nvidia’s Market Cap and CEO’s Losses

Nvidia’s market cap fell from $3.5 trillion to $2.9 trillion, making it less valuable than Apple and Microsoft. CEO Jensen Huang saw his personal wealth drop by $21 billion, as his net worth fell from $124.4 billion to $103.1 billion.

The tech sector as a whole also suffered, with the S&P 500 and Nasdaq both posting significant losses. Other major tech firms like Arm, Broadcom, and Oracle also saw steep declines.

Written by
Sazid Kabir

I've loved music and writing all my life. That's why I started this blog. In my spare time, I make music and run this blog for fellow music fans.

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