Nvidia Corp.’s sharp decline, sparked by concerns over Chinese AI startup DeepSeek, wiped out a historic amount of market value from the world’s largest company.
Shares of Nvidia plummeted as much as 13% shortly after the market opened on Monday, erasing roughly $465 billion in market capitalisation, according to a Bloomberg report. This marked the largest single-day loss for the company, surpassing its previous record of a 9% drop in September, which saw $279 billion vanish.
The impact of Nvidia’s fall rippled through the broader market, given the company’s significant weight in major stock indexes. In fact, past drops by Nvidia have contributed to seven of the ten largest one-day declines in the S&P 500 Index, according to Bloomberg data. On Monday, the S&P 500 slid by as much as 2.3%, while the Nasdaq 100 dropped as much as 3.6%.
About DeepSeek
The newly launched AI model, DeepSeek, is being hailed as a strong competitor to models from OpenAI and Meta Platforms Inc., as it is both cost-effective and operates on less powerful chips.
The DeepSeek-V3 model was developed with an investment of just $5.6 million, a small fraction of what US tech companies typically spend. According to a Reuters report, the open-source model has quickly surged to the top of Apple Inc.’s App Store rankings.