Nvidia drops $600B off its market cap amid the rise of DeepSeek

Nvidia's market cap drops $600B after DeepSeek's R1 model success.

: Nvidia lost nearly $600 billion in market capitalization as its stock price dropped due to DeepSeek's R1 model introduction. DeepSeek, a Chinese AI startup, showcased R1’s efficiency using fewer resources, impacting Nvidia by suggesting that high-end chips aren't crucial for AI advancements. This comes after Joe Biden's export restrictions on AI chips to countries like China, which were later reversed by Donald Trump to foster AI infrastructure development in the U.S.

Nvidia suffered a significant blow to its market capitalization, losing nearly $600 billion, as its stock price declined sharply after DeepSeek, a Chinese AI startup, unveiled its R1 model. This model demonstrated efficiency and functionality comparable to U.S. counterparts with fewer resources, challenging Nvidia's reliance on high-end chips.

The impact of DeepSeek's achievement became evident soon after Joe Biden signed an executive order restricting AI chip exports to countries, including China. Nvidia labeled the order as detrimental to global innovation, but the situation changed when Donald Trump reversed it, instead launching a $500 billion investment into U.S. AI infrastructure.

DeepSeek’s success with R1 has sparked discussions about the future of AI development and the importance of chip technology. As global competition intensifies, the U.S. may need to focus on more than just hardware to maintain its leadership in AI technology.