How DeepSeek devastated the US tech industry
How DeepSeek devastated the US tech industry
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Nvidia suffered the biggest-ever market value drop in history, writes Anthony Cuthbertson, with the Chinese startup inflicting more than $1 trillion in total losses. The sudden arrival of a little-known Chinese app called DeepSeek to the top of the app charts over the weekend sent the US tech industry into a trillion-dollar tailspin.
In the space of a few hours, several of the world’s biggest companies saw their stock plummet, with Nvidia experiencing the biggest one-day loss in market value in history – more than $500 billion. The shock was caused by how quickly a relatively unknown AI startup could catch up with the best apps developed by the US giants. DeepSeek’s R1 chatbot came with similar capabilities to OpenAI’s most advanced ChatGPT tool, while also being free-to-use, open-source, and developed at a fraction of the cost.
US President Donald Trump described the artificial intelligence chatbot as a “wakeup call” for the industry, with tech firms suffering significant dips in their share prices on Monday morning. The worst hit were the chip makers, which have experienced a massive surge in value since the rise of generative AI and the increased demand for their products. Nvidia and Broadcom both saw their value drop by around a fifth.
“DeepSeek’s release of a premium level AI tool, available freely, with a reported (comparatively) miniscule development cost has shaken faith in Silicon Valley and American dominance in the rapidly developing AI market,” Dr Richard Whittle, an economist from the University of Salford, told The Independent.
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