Nvidia Stock Price Colossally Crashes After New DeepSeek AI Model Emerges

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Nvidia Stock Price Colossally Crashes After New DeepSeek AI Model Emerges

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Nvidia remains one of the world’s largest companies by market cap, but the chip-maker is having a tough day on the stock market today. The company’s share price slid by nearly 17% today, wiping out more than $500 billion in market cap. Should this hold through the end of the trading day, it would be far and away the

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. Nvidia’s previous $279 billion one-day dip is the existing record-holder.

Why is Nvidia stock tanking? The stock price had been surging for the past two years as investors felt bullish on the company’s fortunes due to excitement in the market about artificial intelligence. Nvidia sells the necessary GPUs to train large-language models and for general AI use, after all.

But at the end of last week, ******** AI start-up DeepSeek launched a new model, R1, that the company claims is far cheaper than other models out there, including Open AI’s o1. The fear from investors, it seems, is that AI companies may not actually require as much computing power as it was once believed. This, in turn, could have spooked investors and sent Nvidia’s stock price down.

Some of Nvidia’s rivals in the AI space, including Arm and Broadcom, also saw their share prices slump on Monday. Stock prices regularly move, sometimes dramatically so, in response to relevant market announcements.

DeepSeek is not new, but instead was founded after a spin-out from hedge fund High-Flyer in 2023.

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said its R1 model was trained for a cost of about $5.6 million, which is just a small percentage of what OpenAI and others are said to have spent on their systems. Because DeepSeek’s systems have made strides in software, they could be less reliant on hardware like the GPUs that Nvidia sells, and some experts believe DeepSeek might signal a sea-change in the AI landscape.

The emergence of DeepSeek’s new model comes not long after President Trump announced a $500 billion AI infrastructure program,

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, led by investments from OpenAI, Oracle, and SoftBank. At least some of that appears to consist of existing investments that were previously announced.

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, there are some that believe DeepSeek is not being totally honest in explaining the true costs of its systems. AI researcher Nathan Lampert estimates DeepSeek’s true training costs as being as high as $1 billion. Other AI experts, like Scale AI CEO Alexandr Wang, believe DeepSeek and others actually have more Nvidia chips than they may be allowed to disclose given export rules.

From last week: Scale AI CEO Alexandr Wang says that DeepSeek and other ******** AI labs have more Nvidia chips than they can talk about because of current US export controls

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— Morning Brew

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(@MorningBrew)

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The launch of DeepSeek hasn’t gone totally smoothly for the company.

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states that it’s facing “large-scale malicious attacks” on its services just days after releasing.

Nvidia is the

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, only trailing behind Apple and

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. The company’s next move is launching its new GTX 50-series GPUs, which go on ***** this week.

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#Nvidia #Stock #Price #Colossally #Crashes #DeepSeek #Model #Emerges

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