https://www.youtube.com/watch?v=3WgemIoxuNg

CNN— US stocks dropped sharply Monday — and chipmaker Nvidia lost nearly $600 billion in market value — after a surprise advancement from a Chinese artificial intelligence company, DeepSeek, threatened the aura of invincibility surrounding America’s technology industry.

DeepSeek, a one-year-old startup, revealed a stunning capability last week: It presented a ChatGPT-like AI model called R1, which has all the familiar abilities, operating at a fraction of the cost of OpenAI’s, Google’s or Meta’s popular AI models. The company said it had spent just $5.6 million on computing power for its base model, compared with the hundreds of millions or billions of dollars US companies spend on their AI technologies.

That sent shockwaves through markets, in particular the tech sector, on Monday.

The tech-heavy Nasdaq plunged by 3.1% and the broader S&P 500 fell 1.5%. The Dow, boosted by health care and consumer companies that could be hurt by AI, was up 289 points, or about 0.7% higher. Stock market losses were far deeper at the beginning of the day.

Meta last week said it would spend upward of $65 billion this year on AI development. Sam Altman, CEO of OpenAI, last year said the AI industry would need trillions of dollars in investment to support the development of in-demand chips needed to power the electricity-hungry data centers that run the sector’s complex models.

Marc Andreessen, a supporter of President Donald Trump and one of the world’s leading tech investors, called DeepSeek “one of the most amazing and impressive breakthroughs I’ve ever seen,” in a post on X.

The stunning achievement from a relatively unknown AI startup becomes even more shocking when considering that the United States for years has worked to restrict the supply of high-power AI chips to China, citing national security concerns. That means DeepSeek was able to achieve its low-cost model on under-powered AI chips.

Nvidia (NVDA), the leading supplier of AI chips, fell nearly 17% and lost $588.8 billion in market value — by far the most market value a stock has ever lost in a single day, more than doubling the previous record of $240 billion set by Meta nearly three years ago.

For perspective, Nvidia lost more in market value Monday than all but 13 companies are worth — period. Nvidia began the day as the most valuable publicly traded stock on the market — over $3.4 trillion — after its shares more than doubled in each of the past two years. It ended the day in third place behind Apple and Microsoft.

Meta (META) and Alphabet (GOOGL), Google’s parent company, were also down sharply. Nvidia competitors Marvell, Broadcom, Micron and TSMC all fell sharply, too. Oracle (ORCL), Vertiv, Constellation, NuScale and other energy and data center companies tumbled.

That dragged down the broader stock market, because tech stocks make up a significant chunk of the market — tech constitutes about 45% of the S&P 500, according to Keith Lerner, analyst at Truist.

“The bottom line is the US outperformance has been driven by tech and the lead that US companies have in AI,” Lerner said. “The DeepSeek model rollout is leading investors to question the lead that US companies have and how much is being spent and whether that spending will lead to profits (or overspending).”

This week kicks off a series of tech companies reporting earnings, so their response to the DeepSeek stunner could lead to tumultuous market movements in the days and weeks to come. In the meantime, investors are taking a closer look at Chinese AI companies.

“Chinese tech companies, including new entrants like DeepSeek, are trading at significant discounts due to geopolitical concerns and weaker global demand,” said Charu Chanana, chief investment strategist at Saxo. “DeepSeek’s rise could spark renewed investor interest in undervalued Chinese AI companies, providing an alternative growth story.”

A massive rotation out of AI bets

The news also sparked a huge change in investments in non-technology companies on Wall Street.

Energy companies had been traded up significantly higher in recent years because of the massive amounts of electricity needed to power AI data centers. But they all plummeted Monday. Constellation Energy (CEG), the company behind the planned revival of the Three Mile Island nuclear plant for powering AI, fell 21% Monday. Competitors like Vistra (VST) fell 28% and GE Vernova (GEV) was down 21%.

Futures for natural gas, used to power electricity generators, tumbled 5.9%. Oil fell more than 2%.

Bitcoin and other cryptocurrencies also tumbled.

Is this for real?
One achievement, albeit a gobsmacking one, may not be enough to counter years of progress in American AI leadership. And a massive customer shift to a Chinese startup is unlikely. So the market selloff may be a bit overdone — or perhaps investors were looking for an excuse to sell.

“Time will tell if the DeepSeek threat is real — the race is on as to what technology works and how the big Western players will respond and evolve,” said Michael Block, market strategist at Third Seven Capital. “Markets had gotten too complacent on the beginning of the Trump 2.0 era and may have been looking for an excuse to pull back — and they got a great one here.”

https://edition.cnn.com/2025/01/27/tech/deepseek-stocks-ai-china/index.html

This is why I love china. Don't joke with their
Technology.

Good competition

I downloaded mine yesterday...you should too 😌

This Chinese people ehn

Banie:
This is why I love china. Don't joke with their
Technology.

These guys have always made things easier and more affordable. They're the reason almost anyone can own a smartphone today. If not for Chinese phone makers, only celebrities would be using smartphones.

Sadly, when discussions about innovation or progress come up, you’ll hardly hear African countries mentioned. Take Nigeria, for example. The topics of the day are always VDM, VAT, IGR, nyash, Igbo vs Yoruba, Obi, Hilda, Toke, Ronu, IPOB, Bigger Tribe debates, and so on.

It’s honestly so unfortunate.

China own na to copy

They'll never be the first to do something. They'll just wait for the west to do something then copy it and start challenging the original

A healthy competition. I love it

Oya Donald Trump should slam them with 25% tarrif. Then deny visa to Chinese nationals

This is what you get when you elect a failure as a president..

The calamity at White House is busy focusing on irrelevant things..

ViceGovernor:
I downloaded mine yesterday...you should too 😌

Be very careful..even tho all western countries dey spy on people with things like this, China's own is on another level.

Trump will want to ban and buy it

Chinese are so far ahead in technology and they're so humble about it.

Maybe US are probably lying and over-exaggerating about the amount spent on AI

usecondom:
A healthy competition. I love it

USA will soon sit down reason the matter. You’ll soon start to hear the App is a spying app 😃

They’ll soon ban it on App & play store

GeneralPula:
This is what you get when you elect a failure as a president..

The calamity at White House is busy focusing on irrelevant things..

What does trump have to do with this?

Na today China dey challenge US?

China no dey make noise

China is technologically more advanced than the USA...

The least developed Chinese city(Urumqi) is more developed than Washington

Very, very impressive
9ja where are we?

nlfpmod:

https://www.youtube.com/watch?v=3WgemIoxuNg




https://edition.cnn.com/2025/01/27/tech/deepseek-stocks-ai-china/index.html

Healthy competition pushes everyone to innovate better and faster. When Chinese tech like DeepSeek advances, it challenges US giants to step up their game, leading to better, cheaper AI for everyone. It also shows that breakthroughs don’t always need billions of dollars, making tech more accessible. Plus, it diversifies the market, giving users more options. Popular apps and tools improve as companies race to outdo each other. In the end, competition drives progress, benefiting users worldwide with smarter, more efficient technology. It’s a win-win for innovation and consumers!

Hmm

Starzo:

What does trump have to do with this?

Ba today China dey challenge us?

But the other day when US stock went up, it was trump some misguided being were shouting..

GeneralPula:

But the other day when US stock went up, it was trump some misguided being were shouting..

The general stock performance of a country is and indicator of economic growth or decline. So which ever it goes,it directly affect public perception of the person(s) in charge.

This is different....this is about an individual app gaining popularity. This one nor concern trump

Almost 1 trillion dollars presently. Bc of deepseek.
Imagine something people are paying for, somebody just showed up and giving it's equivalent for free.

MERCHANDISER:
China is technologically more advanced than the USA...

The least developed Chinese city(Urumqi) is more developed than Washington

You never travel comot your papa compound.... But your own na to sidon open your mouth like infected yansh

Starzo:

The general stock performance of a country is and indicator of economic growth or decline. So which ever it goes,it directly affect public perception of the person(s) in charge.

This is different....this is about an individual app gaining popularity. This one nor concern trump

Why e no go different..

Shiorrr

Kingray10:
They have lost over 1 trillion dollars. Bc of deepseek

Digital money ... they'll get it back one way or the other

Ok. That’s what taxation does to an economy. High standard of living, costly work force and inflation to extent your country can’t compete with other countries production due to pricing.

Look at china and india for example.

If not for war preparations. Russia would have been ahead. But they are busy making weapons and challenging world military dominance.

Everything comes at a price.

A MISFORTUNE is now in Power

GeneralPula:

Why e no go different..

Shiorrr

Na simple thing to understand