Tue Jan 28 12:12:13 UTC 2025: ## Nvidia Stock Plunges 17% After Chinese AI Startup DeepSeek Unveils Cost-Effective Chatbot

**New York, January 28** – Nvidia, the leading supplier of AI chips, suffered a record-breaking $600 billion market value loss on Monday, January 27, after Chinese artificial intelligence company DeepSeek unveiled its low-cost AI chatbot, R1. The 17% drop represents the single largest one-day loss for a company in stock market history, surpassing Meta’s previous record of $240 billion.

DeepSeek’s R1 chatbot operates at a fraction of the cost of comparable models from OpenAI and Meta, achieving comparable performance with a computing cost of just $5.6 million. This contrasts sharply with the hundreds of millions or billions spent by US tech giants. DeepSeek’s achievement, accomplished through innovative engineering techniques that circumvent US export restrictions on advanced chips, sent shockwaves through the tech sector.

The impact was widespread, with numerous tech stocks plummeting. ASML, Broadcom, and TSMC all experienced significant share price declines, while Meta and Alphabet also saw sharp drops. This broader sell-off reflected the significant weight of tech stocks in the overall market.

While Nvidia acknowledged DeepSeek’s “excellent AI advancement,” analysts expressed differing opinions on the long-term implications. Some view DeepSeek as a potential threat to US tech dominance, while others believe Monday’s selloff was an overreaction, highlighting the continued need for substantial infrastructure to meet the demands of AI technology. Concerns remain about the potential impact of US export restrictions on DeepSeek’s future development.

The dramatic downturn also significantly impacted the net worth of several prominent billionaires. Nvidia CEO Jensen Huang lost nearly 20% of his net worth, dropping to approximately $100 billion. Oracle’s Larry Ellison, Michael Dell, and Binance’s Changpeng Zhao also experienced substantial losses, contributing to a combined $108 billion loss for the world’s 500 richest people. The event underscores the growing influence of AI and the volatility of the tech market.

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