Nvidia Loses $384 Billion in Market Value Amid DeepSeek’s Success

Nvidia Suffers $384 Billion Loss Due to DeepSeek’s Impact

Amid the meteoric rise of the Chinese AI service DeepSeek, whose app has surpassed ChatGPT in App Store downloads, Nvidia’s stock value has plummeted. In a short period, the company lost $384 billion in market capitalization.

How Is Nvidia Linked to DeepSeek’s Success?

The connection is clear: DeepSeek is being hailed as a groundbreaking development in AI. The Chinese innovation demonstrates performance on par with, and sometimes exceeding, ChatGPT while requiring significantly fewer resources.

DeepSeek’s creators report that their model was trained using just 2,048 Nvidia H800 GPUs, with a modest investment of $5.6 million. This pales in comparison to the tens of billions invested in AI by American tech giants like Microsoft, Meta*, and OpenAI.

Potential Market Shift

The success of DeepSeek has prompted leading companies to reconsider their strategies. Reduced reliance on high-cost GPU purchases from Nvidia could significantly impact the company’s revenue. This potential shift in market dynamics has alarmed investors, triggering the stock price drop.

Ripple Effect Across the Industry

Nvidia’s decline has also impacted other companies associated with the AI industry, including AMD, Microsoft, and Meta*.

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The success of DeepSeek marks a potential turning point in the AI landscape, posing challenges to established players and reshaping the market’s expectations.