The US stock market saw a sharp decline after China’s DeepSeek announced an unusual and affordable artificial intelligence model on Monday. A massive selloff followed the revelation, causing the tech-heavy Nasdaq Composite to plummet 3.1%.
Nvidia, the linchpin of the AI boom, led the decline, with shares falling by about 17%. LSEG data shows this was a Wall Street stock’s most significant single-day market capitalization drop. The market-cap wipeout that Nvidia achieved more than doubled the previous record that it had set in September.
Technology Billionaires Take a Massive Hit
Beyond the markets, the wealthiest people in the globe were severely impacted by the losses. According to a Bloomberg article, the 500 richest individuals lost $108 billion. Jensen Huang, a co-founder of Nvidia, witnessed a startling 20% drop in his net worth, dropping by $20.1 billion. According to the news agency, Oracle co-founder Larry Ellison suffered the most significant total loss, having $22.6 billion, or 12% of his wealth, taken away from him.
Other billionaires involved in technology felt the sting as well. Changpeng “CZ” Zhao, a co-founder of Binance, had his net worth plummet by $12.1 billion, while Michael Dell, the founder of Dell Technologies, lost $13 billion.
DeepSeek’s Disruption Sparks Market Concerns
DeepSeek’s disruptive potential in the AI market is highlighted by the selloff. The Chinese company has undermined investor trust in US tech dominance by creating a complex AI model at a tenth of Silicon Valley’s price. Leading firms like Nvidia and Oracle are under growing pressure to protect their competitive advantage in the AI market. According to a Bloomberg Intelligence estimate, capital expenditures for all Big Tech companies are anticipated to total $200 billion by 2025.
The financial setback for tech executives is a clear reminder of the uncertainty surrounding the AI industry’s explosive growth while Wall Street adjusts. Investors will now keenly monitor how the industry reacts to DeepSeek’s surprising ascent.
