Nvidia saw a staggering loss of nearly $600 billion in market value on Monday as tech stocks plummeted in response to concerns that China's artificial intelligence company DeepSeek has overtaken the U. S. in AI advancements. The Nasdaq Composite, which monitors the largest tech companies in the nation, dropped over 3%. The Dow Jones saw a rebound of nearly 300 points after an early decline, while the S&P 500 fell by almost 1. 5%. The market turmoil was triggered by advancements reported by DeepSeek, which released an open-source AI model in December, claiming it took just two months and under $6 million to develop. These figures are dramatically lower than the hundreds of billions invested by U. S. tech behemoths like OpenAI, Microsoft, and Meta in their AI projects, raising alarms that China may be surpassing the U. S. in the scale and effectiveness of AI funding. DeepSeek's application is currently the leading free app in the Apple App Store, pushing OpenAI’s ChatGPT to the second position. Among the hardest hit in the stock market downturn was chipmaker Nvidia, whose shares plummeted as much as 18%. Despite recent strong performance, with shares rising over 200% in the past two years, making it one of the world's largest companies, Nvidia's losses represent the most significant market value drop in U. S. history, according to Bloomberg. In a statement, Nvidia acknowledged that "DeepSeek is an excellent AI advancement" and exemplifies what can be achieved using widely available models, while adhering to export control regulations. Other semiconductor companies also suffered notable declines. Micron Technology and Arm Holdings each fell by 10%, while ASML dropped 6%. Major tech corporations were also affected, with Microsoft down 2% and Alphabet, Google's parent company, declining by 4%.

Meta Platforms, which is creating its own open-source AI model, initially fell but later rebounded to end the day up by 1. 9%. Concerns over DeepSeek's purported advancements persist despite existing export restrictions on advanced semiconductor sales to China. During a recent session at the World Economic Forum, Microsoft CEO Satya Nadella described DeepSeek’s developments as "super impressive . . . and super-compute efficient, " stressing that "we should take the developments out of China very, very seriously. " Rep. John Moolenaar, R-Michigan, chairman of the Select Committee on China, emphasized that the U. S. must prevent models like DeepSeek from jeopardizing national security and must implement stronger export controls on technologies crucial to DeepSeek's AI framework. By the end of 2024, Microsoft has announced plans for $35 billion in investments to construct "trusted and secure AI and cloud datacenter infrastructure. " Constellation Energy, which partnered with Microsoft to reactivate the Three Mile Island nuclear plant for AI server power, saw its shares drop by 20%. Other power firms perceived as beneficiaries of AI like Vistra Energy and NRG Energy also experienced significant declines, with Siemens Energy, a supplier of utility equipment, falling 20% and GE Vernova, another power equipment manufacturer, dropping over 21%. Not all analysts are convinced by DeepSeek's claims. Bernstein analyst Stacy Rasgon expressed skepticism in a note to clients, stating, "We believe that . . . DeepSeek did not 'build OpenAI for $5M. ' The models appear impressive, but we do not see them as miracles. " Giuseppe Sette, president of AI market research firm Reflexivity, noted that DeepSeek's underlying technology seems to be "extremely bullish in the long term, " potentially serving as a blueprint for future AI companies. "DeepSeek has disrupted the market by achieving more with less. Essentially, they only activate the most relevant parts of their model for each query, which conserves costs and computational power. This indicates that the AI landscape will continue to surprise us in the coming years, " Sette commented in a note on Monday.