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Nvidia Loses Record-Setting $560B of Market Cap, Thanks to DeepSeek

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Chart showing the biggest single day stock declines, with Nvidia being the largest

Nvidia Loses $560B of Market Cap Thanks to DeepSeek

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The AI landscape was shaken this week as a Chinese startup, DeepSeek, unveiled a powerful new AI model that appears to rival the capabilities of U.S. giants like OpenAI and Google, but with significantly less powerful hardware.

The release of the DeepSeek-R1 model sent shockwaves through the market, particularly impacting Nvidia, a key player in the high-end AI chip market and now the third most valuable company in the world (after today). Nvidia’s stock plummeted, erasing more than half a trillion dollars from the company’s market capitalization, as investors grappled with the implications of DeepSeek’s announcement.

DeepSeek = Deep Trouble for Nvidia?

Below, we can see how Nvidia’s recent swing compares to previous single-day downturns.

As it turns out, many of the biggest single-day swings have happened to Nvidia. Eight out of 10 to be exact.

DateCompanySingle-Day Market Cap Loss
Jan 27, 2025NVIDIA-$560B
Aug 3, 2024NVIDIA-$279B
Feb 3, 2022Meta-$251B
Jan 7, 2025NVIDIA-$228B
Apr 19, 2024NVIDIA-$212B
Jun 24, 2024NVIDIA-$208B
Apr 29, 2022Amazon-$206B
Jul 17, 2024NVIDIA-$205B
Jul 24, 2024NVIDIA-$205B
Aug 29, 2024NVIDIA-$197B

There are only two non-Nvidia examples in this list:

  1. Meta’s stock was hammered in early 2022 after Mark Zuckerberg announced his “metaverse” vision for the company.
  2. In April 2022, Amazon reported its first quarterly loss in seven years, and investors soured on the company’s investment in EV maker Rivian.

Why Did DeepSeek Send Shockwaves Through the Market?

Concerns arose that future AI models could be developed with greater efficiency, potentially reducing the demand for Nvidia’s powerful GPUs and forcing a reevaluation of the massive investments made by tech giants in AI hardware.

The broader tech sector also felt the tremors, with other AI-related stocks and the overall market experiencing significant declines. DeepSeek’s achievement has ignited a debate about the future of AI development, the role of hardware in driving AI progress, and the potential for unexpected challenges to the current dominance of U.S. tech companies in what has been the hottest tech field in recent years.

Learn More on the Voronoi App

See the surge of Big Tech stocks including Nvidia from 2000 to 2024 in this beautiful visualization on the Voronoi app.

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