Nvidia, the world leader in accelerated computing, lost about $589 billion of its market value on Monday.
According to Bloomberg, the loss was driven by the company’s shares plummeting by 17 percent during midday trading on Wall Street.
The steep decline reverberated across global markets due to Nvidia’s substantial influence on major indices.
Nvidia, a dominant player in AI, has seen its stock soar by approximately 1,900% over the past five years due to heavy investments in the sector.
In Tokyo, companies linked to artificial intelligence fell for a second consecutive day, mirroring a Wall Street rout in which Nvidia’s shares plunged 17%, erasing more than half a trillion dollars from its market capitalisation.
The sell-off was triggered by DeepSeek’s launch of its R1 chatbot, which reportedly rivals US AI leaders’ capabilities at a fraction of their investment costs.
In the United States, the S&P 500 fell
by 2.3 percent, while the Nasdaq 100 dropped 3.6 percent. European markets were similarly affected, with Frankfurt and Paris stock exchanges closing in the red, while London finished flat and Asian stock markets recorded losses.
Technology giants like Microsoft and Alphabet, the parent company of Google, also saw their shares decline, however, Meta managed to buck the trend, trading in the green.
Nvidia has been a major beneficiary of the influx in spending on artificial intelligence (AI) because of the company’s semiconductors, which are essential for AI technologies to work efficiently.
However, the publication said the recent emergence of DeepSeek, a Chinese chatbot platform, appears to have shaken up the AI industry.
DeepSeek recently overtook ChatGPT as the top-rated free app on Apple’s US app store.
In 2022, the US imposed restrictions to limit exports of advanced GPU chips to China.
However, DeepSeek’s researchers claimed they trained their latest model on Nvidia’s H800 chips.
The training was approximately $6 million, which is a fraction of the usual expense for developing high-end AI systems.
DeepSeek’s breakthrough in the AI industry comes as the US intensifies its efforts to maintain dominance in the field with the unveiling of the Stargate Project.
The Project, which was announced by President Donald Trump, is a strategic collaboration between Oracle, Japan’s SoftBank, and OpenAI, the creators of ChatGPT.
OpenAI stated that the initiative would strengthen US AI capabilities, create thousands of jobs, and enhance national security.
