DeepSeek hype: Nvidia lost 600 billion US dollars in stock market value in a day

After the AI app from Chinese company DeepSeek overtook the competition in Apple's App Store on the weekend, Nvidia's stock market value plummeted by almost 600 billion on Monday. It is the biggest one-day loss of this kind in US stock market history. The previously most valuable company in the world has thus slipped to third place behind Apple and Microsoft. However, with a 17% drop in value, Nvidia's share price slide on Monday was not even the biggest; Siemens Energy –, which recently benefited from expectations of the high-power requirements of AI data centers –, even plummeted by a good 20%.

Black day for the AI industry

However, the day was not just bad for Nvidia and Siemens Energy. A whole series of companies that have benefited from the AI hype on the stock market suffered significant losses. The share prices of Oracle fell by 14 percent, Super Micro Computer by more than 12 percent and Cisco by five percent, while Microsoft lost two percent. Bloomberg has calculated that the fortunes of the richest 500 people on the planet fell by a combined 100 billion US dollars in a single day, with Jen-Hsun Huang of Nvidia and Larry Ellison of Oracle alone losing more than 20 billion US dollars each.

The trigger for the black day for the tech industry was apparently the realization that AI software can be trained with significantly less computing power – and therefore also technology from Nvidia – than previously thought. Although allegedly only trained for 5.6 million US dollars, two AI models from DeepSeek are said to keep up with or even outperform the competition from OpenAI & Co. However, it is unclear whether DeepSeek's claims regarding the training of the models are correct. According to the news agency dpa, there was already speculation weeks ago that the Chinese company has access to more Nvidia chips than admitted, considering the US sanctions.

It is clear that many investors, who have driven Nvidia shares in particular to ever new highs in recent months, have now suddenly got cold feet. US President Donald Trump spoke of a “wake-up call” for the US industry. The successes of DeepSeek show that “we have to be extremely focused on competition to win”, Bloomberg quotes him as saying. Overall, however, the news from China is positive because it indicates that you don't have to spend so much money on competitive AI technology. However, this is likely to be the biggest concern on the stock markets.

Disagreement on Wall Street

Meanwhile, there is disagreement among experts about the assessment of DeepSeek's technology. The Financial Times quotes one analyst as saying that the conclusion that DeepSeek copied OpenAI for five million US dollars is “absolutely wrong”: “We don't think this needs further discussion.” However, another analysis states that the development underlines how fragile the AI industry still is because much of it is assuming that companies have an unassailable lead. There was even an opinion that the development was ultimately good for Nvidia. After all, such progress from China could mean that more companies are turning to AI.

(mho)