Nvidia suffered the biggest single-day loss in US stock market history on Monday, wiping $465bn off its market value as a low-cost Chinese AI model sparked a global sell-off in technology shares. The chipmaker’s shares tumbled more than 13%, dragging the tech-heavy Nasdaq down 3.5% at the open, before recovering some losses to close 2.65% lower.
The rout was triggered by the emergence of DeepSeek, a Chinese AI assistant that topped Apple’s US and UK app stores over the weekend, surpassing OpenAI’s ChatGPT. DeepSeek claims to have built its large language model for under $6m, using lower-cost chips and less data, raising doubts about the sustainability of the US AI boom and the valuations of leading tech firms.
Microsoft, Meta Platforms and Google parent Alphabet lost between 2.2% and 3.6%, while AI server makers Dell Technologies and Super Micro Computer slid 7.2% and 8.9% respectively. The S&P 500 fell 2.1% at the open, and the Dow Jones dropped 0.6%. In total, up to $1tn was wiped off US stock markets.
European and Asian tech stocks also slumped. Japan’s SoftBank fell 8%, Tokyo Electron lost 4.9%, and Dutch chip equipment maker ASML crashed 9%. However, the UK’s FTSE 100 and some European indices recovered to end the day in positive territory, as bargain hunters stepped in and US Treasury yields fell.
Analysts noted that the US strategy of restricting China’s access to Western technology may have backfired, encouraging Chinese firms to develop cheaper alternatives. “There is a new AI challenger in town and investors are spooked,” said Axel Rudolph of IG. “The companies that enjoyed first-mover advantage will now be under pressure to launch something even better or be left behind.”
