Advances in artificial intelligence by Chinese upstarts rattled U.S. markets on Monday, with the threat of greater competition prompting a slide in shares of the biggest technology companies.
The Chinese A.I. company DeepSeek has said it can match the abilities of cutting-edge chatbots while using a fraction of the specialized computer chips that leading A.I. companies rely on. That’s prompted investors to rethink the heady valuations of companies like Nvidia, whose equipment powers the most advanced A.I. systems, as well as the enormous investments that companies like Alphabet, Meta and OpenAI are making to build their businesses.
On Monday, the S&P 500 index fell 1.5 percent, and the tech-heavy Nasdaq dropped 3.1 percent. Nvidia was hit hard, plunging 16.9 percent and losing roughly $600 billion in market value. Falling tech stocks also dented market indexes in Europe and Japan.
-Jason Karaian and Joe Rennison writing for the New York Times
Nvidia (NVDA) stock dropped nearly 17% Monday, leading a sell-off across chip stocks and the broader market after a new AI model from China’s DeepSeek raised questions about AI investment and the rise of more cost-efficient artificial intelligence agents. Nvidia’s decline shaved $589 billion off the AI chipmaker’s market cap, the largest single-day loss in stock market history.
My comments: It is an eye-popping decline in market cap for the day, but this stock has rocketed up twentyfold (that would be 2,000 %) over the last five years— and then some.
It was at $6 in Jan. 2020 and at $149.43 (let’s say $150) Jan 6, 2025.