Nvidia Stock: Chinese AI Breakthrough Triggers Historic Plunge

In a seismic market event, Nvidia experienced the largest single-day market value loss in U.S. history on Monday, with its stock plummeting by up to 18%. The tech giant's market capitalization contracted by more than $560 billion following the announcement of a groundbreaking AI model by Chinese startup DeepSeek. This innovative model, developed for less than $6 million using Nvidia's more affordable H800 chips, demonstrated superior performance compared to established systems while requiring significantly less computational power. The development challenges the prevailing assumption that AI advancement necessarily demands expensive, high-performance chips, sending shockwaves through the technology sector.

Market Impact and Industry Response

The ripple effects of Nvidia's stock decline reverberated throughout the tech industry, with the Philadelphia Semiconductor Index recording its steepest drop since March 2020, falling over 10%. Despite Nvidia's attempts to downplay the significance of DeepSeek's innovation by emphasizing the continued necessity of its GPUs for AI operations, investor confidence wavered significantly. The dramatic decline threatens Nvidia's position as the most valuable publicly traded company, potentially ceding the top spot to Apple.