After Chinese AI lab DeepSeek unveiled a free, open-source linguistic model it said it built in just two months and for less than $6 million using limited-capacity chips, Nvidia lost about $600 billion in market cap, the biggest single-day loss of any company in U.S. history.
The chipmaker's stock price fell 17% to close at $118.58. It was Nvidia's worst day on the market since March 16, 2020, at the start of the Covid pandemic. However, the company only became the most valuable publicly traded company last week.
Nvidia's graphics processing units (GPUs) dominate the U.S. market for AI data center chips, with tech giants like Alphabet, Meta, and Amazon (which has also fallen in price) spending billions of dollars to build, train, and run AI models.
Cantor analysts wrote in a report Monday that the release of DeepSeek's latest technology has raised "significant concerns about demand for expensive GPU chips." They also raised questions about the price of AI leadership and the leaders themselves.
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