Published
01/28/2025, 11:01US chip maker Nvidia has experienced the biggest drop in market capitalisation in a single day, losing about $600bn. The company's shares fell by 17.8%, the Financial Times reports.
The reason for this collapse was the success of Chinese startup DeepSeek, which specialises in artificial intelligence. With a much smaller budget, the company was able to demonstrate the effectiveness of its technology, causing investors to question the massive spending by US tech giants on chip makers such as Nvidia.
According to Bloomberg, DeepSeek's latest AI model topped the AppStore over the weekend, becoming the most popular on Apple's charts. Union Bancaire Privee managing director Weisern Ling said DeepSeek's success proves that it is possible to develop powerful AI models at a lower cost. It questioned the need for billion-dollar investments in the technology by companies such as Microsoft and Alphabet.
