DeepSeek Shock Wipes $593 Billion Off Nvidia in a Single Day

Nvidia lost $593 billion in market value on January 27, 2025 — the largest one-day loss ever recorded for any U.S. company — after Chinese startup DeepSeek released AI models claimed to rival leading Western systems at a fraction of the training cost. The selloff rippled across the semiconductor sector and challenged the assumption that frontier AI requires ever-larger fleets of Nvidia's most expensive chips.

The questions were sharp: if capable AI models can be trained cheaply, are $30,000-plus GPUs still essential to winning the AI race? Nvidia was expected to report 72 percent revenue growth to $38 billion for the quarter — its slowest in seven quarters — as investors watched for signs of demand erosion.

So far, demand has held. Microsoft, Meta, Google and Amazon reaffirmed massive data-center spending plans, and shipments of Nvidia's Blackwell accelerators accelerated despite a complex ramp that included design flaws, yield problems and packaging bottlenecks at TSMC. Industry analysts noted that cheaper models historically expand — not shrink — the total market for compute. The episode nonetheless demonstrated how concentrated the AI-chip economy had become around a single company, and how quickly sentiment can swing in a market built on extraordinary expectations.

Source: Reuters, February 24, 2025; U.S. News & World Report. Reference: Nvidia's Chip Demand Faces Scrutiny — U.S. News