Nvidia set a dubious Wall Street record Monday, as the stock at the forefront of the U.S.-led artificial intelligence revolution got a scare from DeepSeek, the Chinese AI company which developed a ChatGPT rival at a fraction of the reported cost of its American peers.
Shares of Nvidia plunged 17% by close, suffering its worst daily percentage loss since March 2020, when stocks briefly crashed at the start of the COVID-19 pandemic.
Nvidia lost $589 billion in market capitalization Monday, which is by far the single greatest one-day value wipeout of any company in history, more than doubling the $279 billion market cap lost by none other than Nvidia on Sept. 3, 2024 (Meta’s $251 billion loss Feb. 3, 2022 is the third-biggest daily loss).
The slide knocked Nvidia from its position as the world’s most valuable company, sending its valuation from $3.5 trillion to $2.9 trillion, less than Apple’s and Microsoft’s.
Nvidia headlined broader U.S. stock losses, as the benchmark S&P 500 fell 1.5% and the tech-concentrated Nasdaq dropped 3.1%, and other major AI technology providers including fellow chip designers Arm and Broadcom plus data storer Oracle all tanked at least 10%.
In an afternoon statement, a Nvidia spokesperson called DeepSeek’s model an “excellent AI advancement” which is “fully export control compliant” while still requiring “significant numbers” of Nvidia’s graphics processing units (GPUs).