How DeepSeek shook US markets
US tech czars lose $108 bn in one day, Nvidia’s Jensen Huang’s net worth plunges by $20bn
US Market Impact:
– $1 trillion wiped off global stock market on Monday
– $589 billion lost by Nvidia in a single day (record)
– 17% drop in Nvidia’s stock price
– $21 billion lost by Nvidia CEO Jensen Huang
– $108 billion total wealth lost by world’s richest individuals
DeepSeek’s Cost Advantage:
– $5.6 million spent by DeepSeek to develop R1 AI model
– 20-50x cost advantage of DeepSeek’s R1 over OpenAI’s G1
Market Indexes:
– 3.1% drop in Nasdaq index
– 28.3% loss in Vistra stock
DeepSeek’s App Success:
– DeepSeek’s R1 AI assistant became the top app on Apple’s US App Store
The slump was spearheaded by Nvidia, the driving force behind the AI boom, whose stock fell by about 17%. The market capitalisation of a Wall Street stock dropped by a record amount in a single day.
Changpeng “CZ” Zhao, a co-founder of Binance, had his net worth plummet by $12.1 billion, while Michael Dell, the founder of Dell Technologies, lost $13 billion.
Leading firms like Nvidia and Oracle are under growing pressure to protect their competitive advantage in the AI market. According to a Bloomberg Intelligence estimate, capital expenditures for all Big Tech companies are anticipated to total $200 billion by 2025.
After China’s DeepSeek announced a novel, affordable artificial intelligence model on Monday, the US stock market saw a sharp decline. The tech-heavy Nasdaq Composite plunged 3.1% as a result of the statement, which set off a major selloff.
The surge in US stock markets over the past two years has been largely driven by optimism about AI investments, which has sparked concerns about a potential bubble.
Within a week of its release, DeepSeek has risen to the top of the US app download charts.
It appears at a time when the US has been warning of a tech race with China and is taking action to prevent China from purchasing the cutting-edge chip technology that underpins AI.
Chinese AI developers have collaborated and tried out novel methods to the technology in order to continue their work without consistent supplies of imported powerful CPUs.