Nvidia Loses Nearly $600 Billion in Market Value as Chinese AI Startup Disrupts Sector
Apple Reclaims Top Spot as World's Most Valuable Company Amid Nvidia’s Historic Losses
Shares of Nvidia plummeted Monday, marking the company’s worst performance since the March 2020 market crash triggered by the COVID-19 pandemic. The dramatic drop came as a global tech stock sell-off fueled concerns over the future of American leadership in artificial intelligence (AI). These worries were largely triggered by the rapid rise of a Chinese AI startup.
Nvidia, one of the primary beneficiaries of the AI boom, saw its shares fall as much as 18%, reducing its market value to below $3 trillion. Despite the setback, Nvidia’s stock has soared by more than 480% over the past two years. The $600 billion drop in market value represents the largest single-day loss in U.S. stock market history, according to Bloomberg—nearly double the second-largest loss, which occurred in September 2024 when Nvidia shed $279 billion in value.
To put the scale of the loss into perspective, Nvidia’s drop is greater than the entire market value of major companies such as Exxon Mobil, Costco, Home Depot, or Bank of America.
The sell-off was fueled by the rapid advancements of DeepSeek, a Chinese AI startup whose latest large language model has made waves in Silicon Valley. Nvidia issued a statement acknowledging DeepSeek's progress, noting that the company’s use of “widely available models and compute that is fully export control compliant” demonstrates the potential of AI, adding that the surge in DeepSeek’s popularity—its app topped the Apple App Store on Monday—could drive additional demand for Nvidia’s graphics processing units (GPUs), a key technology in AI applications.
"Inference requires significant numbers of NVIDIA GPUs and high-performance networking," the company said.
Nvidia’s meteoric rise in 2023, fueled by the AI boom, pushed the company into the top five most valuable global firms. At its peak, Nvidia surpassed rivals like Alphabet, Microsoft, and even Apple, briefly reaching a market value of $3.7 trillion. However, with Monday’s losses, Apple reclaimed the title of the world’s most valuable company, while Nvidia’s market cap dropped to approximately $2.9 trillion.
The market downturn also affected broader indices, with the Dow Jones Industrial Average—though ultimately finishing the day higher—starting off in the red. Nvidia’s struggles weighed on the index after its inclusion in November, when it replaced rival chipmaker Intel. The Nasdaq Composite, which tracks tech stocks more closely, fell by around 3%.
As the global tech sell-off continues, the S&P Technology sector also turned negative for the year, marking the only sector to experience losses thus far. The turbulence in the market highlights the ongoing challenges facing the tech industry, especially as competition in AI technology intensifies on the global stage.