In an unprecedented financial blow, NVIDIA experienced the largest single-day decline in market value ever recorded for a U.S. company, shedding close to $600 billion. The company’s stock plunged by $171.18 per share following investor concerns about mounting competition in the AI hardware industry.
The steep decline was triggered by news that China’s DeepSeek had successfully developed an advanced AI model at significantly lower costs, posing a direct challenge to NVIDIA’s dominance in the premium AI processor market. DeepSeek’s breakthrough has raised fears that demand for NVIDIA’s high-priced processors could see a significant downturn, with industry insiders questioning the sustainability of its current market valuation.
The market turbulence took a heavy toll on NVIDIA’s CEO, Jensen Huang. The billionaire’s personal wealth nosedived by over $20 billion, pushing him out of the global top 10 billionaire rankings. Huang, who had been celebrated for steering NVIDIA to the forefront of the AI and graphics processing unit (GPU) sectors, now faces increased scrutiny over the company’s ability to maintain its leadership amid growing global competition.
The broader technology sector also faced challenges during the trading session. However, Apple defied the downward trend, posting a 3% increase in stock value. Analysts believe this rise reflects a market pivot toward alternative investments, as doubts grow over the profitability of high-cost AI infrastructure in the long term.
NVIDIA’s historic loss underscores the volatile nature of the tech industry, where innovation and competition can rapidly reshape market dynamics. As global firms, particularly in regions like China, continue to advance their capabilities, established players like NVIDIA may need to rethink strategies to retain their edge in a fiercely competitive landscape.
