New York, NY – The launch of DeepSeek AI, a groundbreaking artificial intelligence platform, has sent shockwaves through global markets, leading to the worst trading day on the Nasdaq in 2025. Tech giant Nvidia, a key player in the AI revolution, saw its stock plunge by 17%, wiping out $465 billion in market value—the largest single-day market loss in history.
DeepSeek AI, which promises to revolutionize data processing and predictive analytics, was hailed as a game-changer in the industry. However, the platform’s announcement caused investor panic over its implications for existing AI technologies and their reliance on Nvidia’s cutting-edge chips. This market reaction reflects broader concerns about overvaluation in the tech sector and the pace of AI innovation.
Nvidia, which has dominated the AI chip market for years, bore the brunt of the sell-off. Its valuation drop is being seen as a recalibration rather than a condemnation of the company’s fundamentals. Analysts suggest that DeepSeek’s novel approach could disrupt Nvidia’s market share, leading to uncertainty about the long-term demand for its high-performance chips. According to Forbes, Nvidia’s CEO Jensen Huang assured investors during a press call that the company remains “well-positioned to power the next wave of AI innovation,” highlighting ongoing partnerships and cutting-edge developments in generative AI and autonomous systems.
DeepSeek AI, founded by a Chinese-American entrepreneur who previously collaborated with Nvidia, uses an alternative architecture that relies less on traditional GPUs and more on proprietary, energy-efficient chip designs. The New York Times reports that this approach has the potential to make AI systems faster and more cost-effective, appealing to industries ranging from healthcare to finance. The announcement of DeepSeek’s platform has been met with a mix of excitement and apprehension. While some experts see it as the next evolution in AI technology, others view it as a disruptor that could upend existing supply chains.
The Nasdaq’s steep drop reflects broader market fears that the tech sector’s rapid growth may not be sustainable. The National described Nvidia’s stock dip as part of a “healthy correction,” with investors reassessing valuations amid growing competition in the AI space. Other major tech players, including Alphabet and Microsoft, also experienced declines, though to a lesser extent.
Industry experts remain optimistic about Nvidia’s long-term prospects despite the sell-off. MoneyControl highlighted that Nvidia’s dominance in gaming and cloud computing positions it well to weather competition from emerging players like DeepSeek. Meanwhile, WSJ pointed out that DeepSeek’s founder’s connections to the AI industry have further heightened attention on this groundbreaking launch.
Investors will now closely watch Nvidia’s next earnings report to assess whether the impact of DeepSeek is material or largely speculative. With companies scrambling to innovate and capture market share in a rapidly evolving landscape, DeepSeek AI’s emergence underscores the fast-changing nature of the AI industry and its ripple effects on established players like Nvidia.
