DeepSeek AI causes a $593B shockwave. Nvidia, OpenAI, Microsoft, Google, and global stocks impacted. Get the latest updates here.The launch of DeepSeek’s cost-effective AI assistant in China has sent shockwaves through global markets, leading to a record $593 billion loss for Nvidia and a 3.1 per cent drop in the Nasdaq. As investors recalibrate, the implications for the tech industry and AI landscape are profound.
DeepSeek AI, a low-cost Chinese artificial intelligence (AI) start-up from Hangzhou, has rattled United States tech stocks and the global stock markets, tanking the value of chip maker Nvidia by as much as $593 billion overnight—a record 17 per cent one-day loss for the Silicon Valley golden child. According to LSEG data, it is a record one-day m-cap loss for a Wall Street stock in history.
The AI’s disruption has hit Jensen Huang’s Nvidia the hardest, but the scenario is unpleasant across the board — the S&P 500 dropped, and the Nasdaq slumped over 3 per cent. Fears over the costly US endeavours in AI tech against the reportedly comparable Chinese alternative—available on open source and made at a fraction of the cost—was what largely dragged the markets.
We take a look at how DeepSeek’s AI disruption sent a $593 billion shockwave to Nvidia, dragged global tech stocks and rattled stock markets around the world.
What is DeepSeek AI?
According to a Reuters report, Chinese start-up DeepSeek launched a free AI assistant last week, claiming that it uses less data at a fraction of the cost of other existing alternatives, such as Open AI’s Chat GPT, Google’s Gemini and others.
By January 27, DeepSeek AI had overtaken Chat GPT in terms of downloads from the US iOS Apple’s app store, the report added. In fact, DeepSeek has surpassed Chat GPT in several regions, including the UK, Australia, Canada, China and Singapore.
DeepSeek’s models include DeepSeek-V3 and DeepSeek-R1. According to the report, little is known about the Hangzhou startup behind DeepSeek, which is majority-owned by Liang Wenfeng, co-founder of quantitative hedge fund High-Flyer.
Its researchers wrote in a paper last month that the DeepSeek-V3 model, launched on January 10, used Nvidia’s lower-capability H800 chips for training, spending less than $6 million.
According to a post on DeepSeek’s official ‘WeChat’ account, DeepSeek-R1, released last week, is 20 to 50 times cheaper to use than OpenAI’s o1 model, depending on the task.
How Have Tech Stocks Reacted? Nvidia, Broadcom, Microsoft and Google Tumble
On January 27, the US tech-heavy Nasdaq slipped 3.1 per cent, largely due to Nvidia’s drag, which lost a record 17 per cent overnight, followed by chip maker Broadcom Inc, which finished down 17.4 per cent, ChatGPT backer Microsoft down 2.1 per cent, and Google parent Alphabet down 4.2 per cent, as per the Reuters report.
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