Wall Street’s reaction to a sudden upsurge of interest in Chinese startup DeepSeek has wiped a huge amount off the valuation of the US chipmaker
Previously the world’s most valuable company, Nvidia, has plummeted in value (at one stage losing around 18% of its value) in one day, as the market responds to the emergence of Chinese AI company DeepSeek.
DeepSeek appears to throw into doubt previous assumptions about how essential Nvidia’s chips are in the creation of advanced AI models.
DeepSeek’s AI model is similar to those developed by Silicon Valley tech giants but was developed for a tiny amount (reportedly around $5.6m (£4.5m)) in comparison to figures such as US$80bn Microsoft plans to invest in AI this year, and US$60bn Meta plans to spend in AI investments.
China has been restricted from accessing the highest-end AI technology and chips, with limited access to Nvidia’s products, which has led to a reappraisal of the worth of Nvidia in the future development of AI/GenAI.
Nvidia lost more than US$600bn (around £480bn) off its valuation during the day of trading on Wall Street yesterday. It ended the day down 16.9% and worth US$589bn less than it was before.
However, the valuation of the company is still exceptionally high, at US$2.9 trillion, Huang is still worth around $100bn, and Nvidia shares are still up around 1,900% compared to five years ago.
A Nvidia spokesperson said DeepSeek’s model was an “excellent AI advancement” that still required “significant numbers” of Nvidia’s GPUs.
The company’s shares have risen a little today, with Nivida having gained 2.4% in pre-market trading.
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