Nvidia Loses $593 Billion as DeepSeek Challenges AI Dominance

Aakhir Tak – In Shorts

1. Nvidia shares plunged 17%, wiping out $593 billion in market value.
2. China’s DeepSeek developed a free AI assistant using low-cost chips.
3. The drop raises questions about US dominance in the AI sector.
4. Tech stocks in Asia also saw significant declines.
5. Investors turned to safe-haven assets amid market uncertainty.

Aakhir Tak – In Depth

Nvidia’s Historic Loss

US chipmaker Nvidia saw its shares drop by 17%, erasing nearly $593 billion in market capitalization. This marks the largest single-day market loss in history. The decline followed news that China’s AI startup DeepSeek had developed a free AI assistant using low-cost chips, challenging Nvidia’s dominance in the AI sector.

DeepSeek’s Challenge

DeepSeek claimed it developed its AI assistant using less data and lower-cost chips compared to US rivals. This has raised questions about the necessity of massive investments in AI infrastructure. JP Morgan analyst Josh Meyers noted that DeepSeek’s achievement could disrupt the dominance of major players like OpenAI and Google.

Impact on Asian Markets

The fallout from Nvidia’s decline was felt across Asian markets. In Japan, Nvidia supplier Advantest fell by 10%, while AI backer SoftBank Group dropped 5.5%. Data center companies in Australia also saw sharp declines. Markets in Taiwan and South Korea were closed for a holiday.

Risk-Off Sentiment

Investors sought safety in traditional havens amid the market turmoil. US Treasury bonds, the yen, and the Swiss franc all gained. Gold prices fell as investors liquidated bullion to cover losses elsewhere.

The Future of the AI Industry

DeepSeek’s success has sparked a debate about the future of AI investments. Experts believe this development could encourage innovation and competition in the AI sector, potentially reducing reliance on expensive infrastructure.

Aakhir Tak – Key Takeaways to Remember

1. Nvidia lost $593 billion in market value, the largest single-day loss in history.
2. China’s DeepSeek challenged US AI dominance with a low-cost AI assistant.
3. Tech stocks in Asia experienced significant declines.
4. Investors turned to safe-haven assets amid market uncertainty.
5. DeepSeek’s success could reshape competition in the AI industry.

Aakhir Tak Editor-in-Chief

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