NEW YORK: Nvidia, the leading US chipmaker, spearheaded a sharp decline in tech stocks on Monday (Jan 27) following the unveiling of a low-cost generative AI model from China, which poses a potential challenge to American dominance in the burgeoning AI industry.
Developed by DeepSeek, a startup based in Hangzhou, eastern China, the chatbot reportedly rivals the capabilities of leading US AI models while requiring significantly less investment than its American counterparts.
Nvidia, whose semiconductors are critical to the AI sector, saw its shares plummet nearly 17% on Wall Street, wiping out close to $600 billion in market capitalization.
This $589 billion market value loss marked the steepest one-day decline for any company in Wall Street history, according to LSEG data, more than doubling Nvidia’s previous record loss from last September.
The broader tech sector also felt the impact, with the Nasdaq index dropping over 3%.
