Nvidia share price plummets as it loses more than $600B in valuation, the biggest single-day loss in history
Nvidia is facing the biggest single-day market value loss in history, according to a report by Forbes, as the release of an open-source AI model called R1 by China-based DeepSeek has cut more than $600 billion from its valuation, knocking it off its perch as the world's most valuable company.
Nvidia's share price dropped by more than 17% today as DeepSeek's R1 model reportedly displayed capabilities comparable to more well-known names like OpenAI, but at a tiny fraction of the cost. While hundreds of billions of dollars are being poured into AI development in the West, DeepSeek claims it was able to achieve its remarkable results for less than $5.6 million—yes, million, not billion—which it attributed to «our optimized co-design of algorithms, frameworks, and hardware.»
This is a problem for Nvidia because while DeepSeek is still using Nvidia hardware to power its AI, the fact that it seemingly can do so much with so little naturally implies that other companies can do the same. If they all figure out the secret, it could drive a stake through the heart of demand for high-end (and extremely expensive) Nvidia GPUs that's propelled the company's share price over the past few years.
Forbes estimated that the personal net worth of Nvidia co-founder and CEO Jensen Huang also took a hit, dropping from $124.4 billion to $107.5 billion.
«The DeepSeek news is clearly likely to put pressure on semiconductor stocks today and perhaps in coming days, till there is more clarity on its potential impact on AI chip demand,» Jefferies analyst William Beavington wrote (via Barron's).
Nvidia's price is still way above where it was this time last year, but that's one hell of a sharp decline.
Nvidia is the biggest and best-known of the companies to be hit by the R1 revelation, but it's not the only one: A Financial Post report says the total valuation loss across US and European tech companies is set to exceed $1 trillion. As noted by the Canadian Press, Constellation Energy, the company
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