Islamabad, Jan 28: NVIDIA Corp recently faced a sharp decline, with investor concerns over the Chinese artificial intelligence (AI) startup DeepSeek causing a significant drop in its market value. According to Bloomberg, the stock plummeted by as much as 18%, marking its biggest dip since March 2020.
In just one day, NVIDIA’s market capitalization fell by $589 billion, setting a new record for the largest loss in US stock-market history. This surpasses the previous record of a 9% drop in September, which wiped out $279 billion.
DeepSeek, based in Hangzhou, China, has been making waves with its chatbot, which is said to match the capabilities of top US AI players like Microsoft and Google. What sets DeepSeek apart is its remarkably low development cost of just $5.6 million, a tiny fraction of the billions that American tech giants have invested in AI.
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The success of DeepSeek’s chatbot, which has risen to the top of Apple’s US App Store, has raised questions about China’s growing influence in AI development, with some experts suggesting that the country could challenge the US’s long-standing dominance.
The development of AI models like DeepSeek’s is seen as a potential turning point in the AI race, akin to the “Sputnik moment” of 1957 when the Soviet Union launched its satellite into orbit, shocking the US. As a result, global investors are rethinking their strategies, especially as cheaper Chinese AI models threaten to outpace US counterparts in terms of cost and efficiency.
Meanwhile, other US tech stocks like Broadcom and ASML also saw notable declines, reflecting broader concerns about the future of AI investments.
The growing competition between the US and China in AI technology continues to shake global markets, with both sides closely watching how developments like DeepSeek could reshape the industry landscape.
