Nvidia loses record $600 billion market value in one day as DeepSeek AI shakes industry

[midian182]

What just happened? Nvidia has once again broken the record for the largest one-day decline of market value in US history. After the release of the open-source R1 AI model by Chinese startup DeepSeek, which caused panic within the industry, Team Green's shares dropped 17%, resulting in its market cap falling by almost $600 billion.

Nvidia's stock price crashed to $118.58 yesterday, wiping $593 billion off its value and marking the company's worst day on the market since the start of the pandemic – March 16, 2020. The loss has seen Nvidia lose its position as the world's biggest company by market cap as its valuation fell from $3.5 trillion to $2.9 trillion, making it less valuable than Apple and Microsoft.

Nvidia's crash was the result of DeepSeek's free, open-source large language model called R1 that launched last week and is now the top app in the US Apple App store. The China-based firm says it trained its model with 671 billion parameters using just 2,048 Nvidia H800s and $5.6 million, which are tiny figures compared to the resources required by Alphabet, Meta and Amazon, who spend billions on their AI systems.

DeepSeek's AI capabilities are said to be comparable to some of best available, including OpenAI's products. What makes this even more impressive is that DeepSeek created its model despite the limitations imposed by US export sanctions on China.

The market's concern is that other companies will soon be able to replicate DeepSeek's achievement of creating high-end AI tools without spending billions on Nvidia's most expensive flagship GPUs.

Nvidia's share price over the last month

Other tech companies saw their share prices fall, with Arm, Broadcom and Oracle all crashing at least 10%. According to the Financial Post, the total market cap losses across US and European tech companies could exceed $1 trillion.

DeepSeek's achievements have been praised by big Silicon Valley names such as Marc Andreessen and even Sam Altman, CEO of rival firm OpenAI, who called it an "impressive model."

"We will obviously deliver much better models and also it's legit invigorating to have a new competitor!" Altman wrote.

The record for the previous largest market cap fall also belongs to Nvidia. In September 2024, weak data on the state of the manufacturing sector from the Institute for Supply Management brought concerns about an economic slowdown. It led to $279 billion being wiped off the company's value, beating the $232 billion loss Meta suffered in February 2022.

Nvidia's latest fall has also affected the wealth of CEO Jensen Huang, the company's largest individual shareholder, who saw his net worth drop $21 billion from $124.4 billion to $103.1 billion.

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Nvidia loses record $600 billion market value in one day as DeepSeek AI shakes industry

 

[techstrike]

Is it because of the Chinese AI alone? or also because the new 50xx series are NOT as fast as expected ?

...Just wonder...

 

[Subset6]

Knew that AI bubble was gonna pop, did not expect it be to this large, 600B. Yikes!

 

[VariableSpike]

Is it because of the Chinese AI alone? or also because the new 50xx series are NOT as fast as expected ?

...Just wonder...

Highly likely its 90% the AI considering how much money Nvidia is making from compute and how a) this model didn't need as many resources as the current notions around AI expected b) running the model yourself is not that computationally expensive, so in theory less market to sell expensive chips to for in house ai stuff, which spooked the investors, and clewrly some have clocked that we are starting to get into the "get things efficient and functional" phase of the ai bubble deflating if this continues, which would be very bad news for nvidia

 

[yRaz]

I believe this is what is called a "correction." nVidia had a price to earnings ratio of 55 which means that it would take 55 YEARS for them to generative enough revenue per share to justify their stock price. Another way to look at this is NV hasn't generative enough revenue in their 30 year history to justify the current stock price.

NV is immensely overvalued and the cancelation from hyperscalers of their new AI chips only solidifies this fact. I bet we'll see a 5090ti this generation because they won't be able to sell all their chips to AI companies like they did with the 40 series. Why sell a 4090ti for 3k when you can sell the same chip to an AI company for 50k? I remember reports of startups buying pallets of 7900xtx's because they could get more performance per dollar compared to a single H100.

 

[McMurdeR]

The more you bought, the more you'll lose

 

[Dimitriid]

Feels good to see the first big AI bubble burst but really, after a single demo from a single Chinese company? Something tells me the big players like Microsoft, Amazon and Google likely colluded to crash it just to get out of paying their checks to Nvidia without caring one bit about the domino effect this will have eventually reaching them: You burn not only Nvidia doing this but you're also burning all chip foundries Nvidia uses which is pretty much all of them, which is not something they'll be able to immediately recover eventually hurting their own data centers too.

Still Nvidia potentially dying would be like a life saving round of chemotherapy for PC gaming at this point: don't think they will but they'll certainly be humbled a lot into backing the *!@#* off with their nonsense: Still the advice for PC gamers should be to hold the line now more than ever: don't buy Nvidia cards, it's the only chance to get them to die out or at least stop them from continuing with proprietary everything.

 

[Kotters]

That AI still runs on nvidia. Investors are ridiculous.

 

[opckieran]

Feels good to see the first big AI bubble burst but really, after a single demo from a single Chinese company? Something tells me the big players like Microsoft, Amazon and Google likely colluded to crash it just to get out of paying their checks to Nvidia without caring one bit about the domino effect this will have eventually reaching them: You burn not only Nvidia doing this but you're also burning all chip foundries Nvidia uses which is pretty much all of them, which is not something they'll be able to immediately recover eventually hurting their own data centers too.

Still Nvidia potentially dying would be like a life saving round of chemotherapy for PC gaming at this point: don't think they will but they'll certainly be humbled a lot into backing the *!@#* off with their nonsense: Still the advice for PC gamers should be to hold the line now more than ever: don't buy Nvidia cards, it's the only chance to get them to die out or at least stop them from continuing with proprietary everything.

nVidia is here to stay. Despite having 20% of their stock wiped out in a single day, they’re still worth five TIMES what AMD, Intel, and Qualcomm are worth COMBINED. The only way they nVidia ever get wiped out is if they pulled an Intel and decide to stagnate for 10 years, which they won’t. And they didn’t get to a Trillion-Dollar valuation by producing an inferior product. You might not like the proprietary nature of CUDA, but there is simply no alternative at the moment.

As for any “collusion”, most big tech companies lost significantly in their stock valuations. So I’m not sure if that theory holds water. If anything, the CCP are the ones who are doing the most damage to the US stock market with DeepSeek. Whether it’s intentional or not? Who knows. They’re certainly laughing about it right now that’s for sure.

 

[pnntmp]

R1 is amazing, but it's already clear what the important novelties are. The necessary software changes will be implemented quickly in other models, and then again it'll boil down to who has the top notch hardware in top notch quantities.

There is no reason to believe the information about the model training price and and hardware used, but even if it's true and these results were achieved with a small amount of cheap hardware - imagine what can be done with a large amounts of far superior hardware. This will increase the demand for chips.

Overall, the importance of all this was wildly exaggerated.

 

[takaozo]

Not sure on how much AI hardware the market will absorb from now on, but for sure specialized ASICS will be the future. Antminer did a wonderful job for BTC and I'm sure some alternatives to GPU are being developed right now.

NVIDIA: "Geforce cards anyone?"

 

[ScottSoapbox]

I hope this the start of a trend and not merely a startup overselling their accomplishment.

AI is here to stay, but the sooner we get to steady (plateaued) demand the sooner growth in gaming sales matters again.

 

[yRaz]

nVidia is here to stay. Despite having 20% of their stock wiped out in a single day, they’re still worth five TIMES what AMD, Intel, and Qualcomm are worth COMBINED. The only way they nVidia ever get wiped out is if they pulled an Intel and decide to stagnate for 10 years, which they won’t. And they didn’t get to a Trillion-Dollar valuation by producing an inferior product. You might not like the proprietary nature of CUDA, but there is simply no alternative at the moment.

As for any “collusion”, most big tech companies lost significantly in their stock valuations. So I’m not sure if that theory holds water. If anything, the CCP are the ones who are doing the most damage to the US stock market with DeepSeek. Whether it’s intentional or not? Who knows. They’re certainly laughing about it right now that’s for sure.

They're still massively over valued. They're PE went from 55 to 42. Iets see what they're profitable for Q4 2025 look like.

 

[AnilD]

The real winner here is DeepSeek proving you don’t need a trillion-dollar budget to shake up the AI world.

 

[airbornex]

Jensen Huang’s net worth dropped $21 billion in a day, which is like losing 10 yachts and a small country—but hey, at least he still has his leather jackets.

 

[BogdanR]

That AI still runs on nvidia. Investors are ridiculous.

True but on a significantly smaller amount of smaller, cheaper, yesterday’s chips. While under an embargo.
This was all but a small 20% correction on Nvidia’s stock which continues to be over inflated. Remember what happened in 2008 when investment banks were allowed a 33:1 leverage ratio? Well Nvidia is still at 42, down from 55 or 56.
I hope Huang kept his older jacket.

 

[AlexIL]

Markets had to fall. Stock exchange economy is not sustainable in long run. MBA CEOs can’t run any production except running it aground. US and other governments understand this and see the downfall in immediate vicinity. That’s why we have all these pointless wars and it seems like the world went nuts.

 

[JupitersMoon]

Now we just need the housing bubble to pop lol

 

[Kotters]

True but on a significantly smaller amount of smaller, cheaper, yesterday’s chips. While under an embargo.
This was all but a small 20% correction on Nvidia’s stock which continues to be over inflated. Remember what happened in 2008 when investment banks were allowed a 33:1 leverage ratio? Well Nvidia is still at 42, down from 55 or 56.
I hope Huang kept his older jacket.

Fewer chips needed for the same performance just means they can spend the gained efficiency on larger and more performant models. Never in the history of ever did a hype train ever go "this is enough for us."

 

[kiwigraeme]

Tariffs and trade wars won't help .

USA companies overvalued for earnings per share is nothing new.
Huge pensions funds etc - kind of works the same way BTC works , belief someone will pay more tomorrow, with added what else can we do.

Least Nvidia makes real products - always amazed with new IPs Billion dollar launches , no real product , only made up projections and on first day of IPO is valued more than existing companies 100 years old that has profit , land, assets ,products

Not saying the stock market is a ponzi/pyramid scheme but does have vague whiff of one

Plus also find in weird people going into bat for these companies - They are immoral, greedy and don't care about you. Yes we have preferences, some are better than others

Also the fascination with how big a company is vs that company - don't understand it , except for analysis . Least if you support your local high school basketball team they are mostly kids in your neighbourhood, except the rich school down the road that got that tall Puerto Rican kid in on a sweet deal

 

[BogdanR]

Fewer chips needed for the same performance just means they can spend the gained efficiency on larger and more performant models. Never in the history of ever did a hype train ever go "this is enough for us."

Sure. At an adjusted price.

 

[dipankar]

The USA has been trying for the last 5 years to impede China's technological advancement by imposing numerous tariffs on various products, banning the export of advanced semiconductor chips to China, and restricting Chinese companies access in the USA. However, from what I am observing, this strategy has backfired so far. China has made significant progress in various technology fields over the last 10 years. In some technology sectors, China has taken the lead in advancement.

If the new President Donald Trump continues to restrict USA companies from manufacturing and R&D in foreign countries, their companies may lose their supremacy and efficiency. Firstly, we must acknowledge that USA and Western companies are much less efficient in terms of end price of products. Chinese manufacturers produce various products more cheaply than those in developed countries. These countries are feeling insecure because Chinese companies are penetrating their domestic markets. However, restricting Chinese companies from selling goods domestically will not be effective. Their domestic companies may regain market share domestically or in allied countries. However, they will struggle to compete with Chinese companies in the rest of the world.

I believe the USA is on the verge of losing its supremacy in various fields, and the next era of dominance will belong to China. This may not be good news for some countries due to China's aggressive approach in the past. Being a more powerful country comes with greater responsibilities. Let's see how China will manage its status of supremacy after surpassing the USA in terms of economic GDP.

 

[scoffer]

Boo Hoo........my heart pumps purple piss for the poor little shareholders..... (Alliteration at it's best..)

 

[Puiu]

Fewer chips needed for the same performance just means they can spend the gained efficiency on larger and more performant models. Never in the history of ever did a hype train ever go "this is enough for us."

Yeah, but it does have serious potential to slow down investments in the short and medium term. Saturation will eventually happen and investments will pick up again.

 

[Liranan]

True but on a significantly smaller amount of smaller, cheaper, yesterday’s chips. While under an embargo.
This was all but a small 20% correction on Nvidia’s stock which continues to be over inflated. Remember what happened in 2008 when investment banks were allowed a 33:1 leverage ratio? Well Nvidia is still at 42, down from 55 or 56.
I hope Huang kept his older jacket.

nVidia is the bubble of bubbles with that ratio.