Nvidia lost $384 million in market value in a day due to the hype surrounding Chinese AI startup DeepSeek

The application of the Chinese startup DeepSeek for working with a proprietary AI chatbot has managed to surpass the famous ChatGPT in its popularity in the Apple App Store. This has shaken investors’ faith in the power of the American AI industry – stock prices of many Western companies, including Nvidia and ASML, began to decline significantly in price on Monday.

Image source: NVIDIA

A revelation for stock market participants was the ability of the Chinese company to offer an AI chatbot comparable in performance to ChatGPT, not only free for users, but also at much lower cost for the developer himself. It turns out that to create effective language models, you can limit yourself to much more modest hardware resources and material costs. In preliminary trading on Monday, Nvidia shares fell by up to 9%, causing the company’s capitalization to drop by $384 million. ASML securities sank by 11%, which is a new anti-record for one trading session for the period since October 15 last year. Futures for the tech-heavy Nasdaq 100 index also lost value.

As you know, Nvidia has been considered one of the main beneficiaries of the so-called artificial intelligence boom over the past two-plus years, as it develops and supplies accelerators for related computing systems. ASML, which is due to release its quarterly report this week, is the largest supplier of lithography scanners, which are needed to produce chips used in computing infrastructure.

The activity of American companies and authorities in the development of such infrastructure has been widely covered in the press in recent days. Thus, the Meta✴ Platforms company announced its readiness to spend up to $65 billion on the construction of data processing centers. The Stargate project, announced with the participation of US President Donald Trump, implied investments of up to $500 billion over the next four years. All indications were that the United States would not stop at high costs to maintain its leadership in artificial intelligence. The DeepSeek breakthrough proved that they are not always required when focusing on software optimization in resource-constrained environments. If all industry players realize this imbalance, the need for products from the same ASML and Nvidia may be revised downward. This is pushing shares of Western technology companies down in trading on Monday.