Nvidia Loses $600 Billion as DeepSeek's AI Model Disrupts Market

The recent release of DeepSeek's R1 model, an advanced AI system developed at a fraction of the cost of its U.S. counterparts, has led to a historic market plunge for Nvidia. The semiconductor giant saw its stock drop nearly 17%, resulting in a loss of approximately $600 billion in market capitalization, marking the largest single-day loss in U.S. history. This decline has raised concerns about the sustainability of Nvidia's dominance in the AI chip market, as DeepSeek's model suggests that high-end hardware may not be necessary for impressive AI capabilities. The ripple effects of Nvidia's drop impacted the broader stock market, with significant declines across tech industries, although some major companies like Apple and Salesforce managed to gain. Analysts remain divided, with some predicting continued demand for AI computational power despite fears of a slowdown. DeepSeek's success has prompted scrutiny over U.S. policies aimed at restricting China's access to advanced technology, highlighting potential weaknesses in those efforts.