Nvidia Loses $600 Billion in a Day as a Cheap Chinese AI Rattles the Market

The chip maker's stock fell 17 percent — the largest one-day loss of value for any company in history — after DeepSeek's cheap, capable model made investors question whether AI really needs as many expensive chips as they'd assumed.

Nvidia's stock fell 17 percent today, erasing about $600 billion of the company's value in a single session — the largest one-day loss any company has ever suffered. The cause was a Chinese program most investors had not heard of a week ago. DeepSeek's R1, released last Monday, showed that a frontier-level AI could be built cheaply and run on fewer and less powerful chips than the American industry assumed it needed. If that is true, the reasoning went, the world may not need nearly as many of Nvidia's chips as the price of Nvidia's stock implied.

The sell-off spread to everything connected to the AI buildout — other chip makers, the power companies signing data-center deals, the tech giants spending tens of billions on hardware. DeepSeek's free assistant, meanwhile, became the most-downloaded app in Apple's U.S. store over the weekend, passing ChatGPT.

Whether the panic was justified is the argument now underway. The bulls point out that cheaper AI means more AI — if each answer costs less, people will use far more of it, and that still needs chips. Nvidia itself said DeepSeek's work actually showed how valuable its chips are. The bears point out that the American labs' spending, and the valuations built on it, assumed a moat that a Chinese startup just stepped over.

By the end of the week Nvidia recovered much of the loss. But the day left a mark: the market had treated the AI buildout as a one-way bet, and for a few hours a free program from Hangzhou made it look like a question.