What Happened?
DeepSeek against U.S. tech giants? Of Course, you heard it right. They’ve developed a large language model that can give tough competition at a much lower cost. This development gave the U.S. a shock as they had restricted China’s access to advanced AI chips, yet Apple App Store DeepSeek still managed to find its way.
- Tech stocks crashed: The S&P 500 tech sector fell 5.6%, its worst drop since 2020.
- Nvidia suffered the most: Its market value dropped by $590 billion, a massive loss, while Nvidia’s CEO Jensen Huang lost $20.8 billion in net worth.
- Top executives lost billions: Oracle’s Larry Ellison saw a $27.6 billion drop in net worth.
- AI-related energy stocks were hit too: Vistra Corp, an independent power producer, dropped 28.3% because investors considering Deepseek’s hype thought that AI infrastructure demand might not be as strong as expected.
Impact of DeepSeek AI on the U.S. Stock Market:
Significant Impact, For sure.
What’s the actual reason behind this?
The announcement of AI competition from China raised concerns that it could be a strong competitor to Nvidia, Broadcom, and Google. This projection created panic in investors, who sold off their stocks, causing prices to fall sharply.
Has everyone out there faced the loss?
Not exactly, even though tech stocks crashed more than half (351) of the S&P 500 companies gained value on Monday. This even shows big tech stocks’ influence over the entire market. Even though the Dow Jones Industrial Average, which relies less on tech, ended the day with a small gain.
What are people saying?
This isn’t just a win for China – it’s a GAME CHANGER. DeepSeek’s success shows the U.S. can no longer claim undisputed tech dominance. – The Saviour on his recent thread on X.
U.S. vs China. Who will win the A. I race? Who will dominate the global market? Or any other ‘Surprise’ Startup will go ahead with both. Indeed, time will unfold this heated mystery.
Read More: Revival of US Tech Stocks Ignited after DeepSeek’s AI sell-off