Nvidia Corp.’s plunge, driven by investor concerns about the Chinese artificial intelligence startup DeepSeek, wiped out a historic amount of stock-market value from the world’s largest company.
Nvidia shares fell 17% on Monday, marking the largest drop since March 2020 and erasing $589 billion from the company’s market capitalization. This surpassed the previous record set in September, when a 9% drop wiped out about $279 billion in value, making it the largest in US stock-market history.
The impact of Nvidia’s decline resonated throughout the market due to its significant weight in major indexes. Including Monday’s slump, Nvidia selloffs have accounted for eight of the top ten biggest one-day drops in the S&P 500 Index, based on market value, according to Bloomberg data. The S&P 500 fell 1.5% on Monday, and the Nasdaq 100 tumbled nearly 3%.
The semiconductor maker led a broader selloff in technology stocks following concerns reignited by DeepSeek’s low-cost approach that major US companies have invested too heavily in developing artificial intelligence. The Chinese firm seems to offer comparable performance at a fraction of the price.
The latest AI model from DeepSeek, released last week, is widely seen as competitive with those of OpenAI and Meta Platforms Inc. The open-sourced product, founded by quant-fund chief Liang Wenfeng, currently leads Apple Inc.’s App Store rankings.
“Concerns have immediately emerged that it could be a disruptor to the current AI business model, which relies on high-end chips and extensive computing power and energy,” Jefferies analysts noted in a client memo.
Nvidia has been the primary beneficiary of the surge in AI spending due to their design of semiconductors used in the technology. While heavy spending in this area is likely to continue, investors may become hesitant to reward companies that are not demonstrating a sufficient return on investment.
Meta announced plans on Friday to increase capital expenditures on AI projects this year by about half, up to $65 billion, which propelled its shares to a record high. This followed announcements from OpenAI, SoftBank Group Corp., and Oracle Corp. about a $100 billion joint venture called Stargate, aimed at developing data centers and AI infrastructure projects across the United States.
Historia Continúa
In an effort to impede China’s advances in AI, the US has banned the export of advanced semiconductor technologies to the country and imposed restrictions on the sale of advanced Nvidia AI chips to other nations. However, DeepSeek’s progress suggests that Chinese AI engineers have found ways to circumvent these export bans by focusing on enhanced efficiency with limited resources.
Nvidia stated on Monday that DeepSeek’s model represents “significant AI progress” and indicated that the Chinese company did not violate US restrictions limiting access to advanced US chips in its technology creation. It also stated that inference, or the process of running AI models, requires a significant number of Nvidia GPUs and high-performance networking.
–Con la asistencia de Philip Sanders y Cagan Koc.
(Actualización de movimientos de acciones al cierre del mercado, se agregan detalles en el último párrafo)
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