DeepSeek's AI Breakthrough Triggers $108 Billion Tech Selloff, Shaking Nvidia's Dominance

$20 billion gone in one day! Nvidia's Jensen Huang loses 20% net worth amid DeepSeek disruption

Nvidia co-founder Jensen Huang saw his wealth, which is largely tied to Nvidia's stock, decline by $20.1 billion as shares of the chip-making giant tumbled 17% on Monday -- their worst single-day drop since March 2020. Nvidia, the engine behind the artificial intelligence boom, lost $593 billion in market value, with investors spooked as a disruptive low-cost AI model from China's DeepSeek threatened to upend the profitability of big tech firms. Huang's fortune fell by 20% to $101 billion after the sell-off in Nvidia shares, latest data from the Bloomberg Billionaires Index showed. DeepSeek's breakthrough chatbot, the R1, surged to global prominence over the weekend, topping app download charts and raising questions about Silicon Valley's capital-heavy approach to AI development. The Chinese firm claimed its model was built for just $5.6 million, a fraction of the billions spent by competitors such as OpenAI and Anthropic, shaking the narrative that AI progress requires massive financial investment. The fallout extended across tech billionaires. Oracle co-founder Larry Ellison lost $22.6 billion -- 12% of his wealth -- while Dell Technologies' Michael Dell saw $13 billion evaporate. Binance Holdings co-founder Changpeng Zhao recorded a $12.1 billion drop, according to the Bloomberg Billionaires Index. DeepSeek's success fueled fears that Nvidia's dominant position in the AI supply chain could be under threat. The company, which supplies 90% of the specialized chips used in AI training, has been a cornerstone of the sector's growth. Nvidia's revenue surged 200% over the past two years, reaching $126 billion, while its valuation peaked at $3.62 trillion in November. But the revelation that a small, resource-efficient AI player could rival giants like OpenAI raised concerns about the sustainability of demand for Nvidia's chips. The broader tech sector wasn't spared either. The Nasdaq Composite fell 3.1%, and the S&P 500 dropped 1.5%, as DeepSeek's rise signaled a potential shift in the economics of artificial intelligence. In Japan, Advantest, a leading chip-testing equipment manufacturer and supplier to Nvidia, saw its stock plummet 10% on Tuesday, following a nearly 9% decline on Monday. Tokyo Electron, a major player in chip-making equipment, dropped 5.3%, while SoftBank Group, a prominent technology start-up investor, fell 6%. In the US, Broadcom experienced a significant drop, closing down 17.4%. Microsoft, a key backer of ChatGPT, declined 2.1%, and Alphabet, Google's parent company, ended the day 4.2% lower. Also read | Q3 results: HDFC Bank, ICICI Bank, Kotak Bank, Axis Bank- how did big 4 banks fare? (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

World's Richest People Lose $108 Billion After DeepSeek Selloff

The world's 500 richest people, led by Nvidia Corp. co-founder Jensen Huang, lost a combined $108 billion on Monday as a tech-led selloff tied to Chinese AI developer DeepSeek sent major indices plunging. Billionaires whose fortunes are linked to artificial intelligence were the biggest losers: Huang saw his fortune fall $20.1 billion, a 20% drop, while Oracle Corp. co-founder Larry Ellison's $22.6 billion loss was larger in absolute terms, but represented just 12% of his fortune, according to the Bloomberg Billionaires Index. Dell Inc.'s Michael Dell lost $13 billion, and Binance Holdings Ltd. co-founder Changpeng "CZ" Zhao shaved $12.1 billion.