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On Monday, Nvidia (NVDA, Financial) experienced a 17% share value drop that destroyed nearly $600 billion in market value, becoming the largest single-day U.S. company capital loss in market history. The stock hit $118.5 to become its largest single-day fall since March 2020, when Covid-19 first appeared globally.
The market sold off from escalating concerns about AI industry competition as the main trigger. DeepSeek developed the first free and open-source large language model with the H800 chip production from Nvidia. DeepSeek announced the creation of their model in only two months with an estimated budget of less than $6 million, which raised questions about Nvidia's potential to maintain premium GPU sales.
Nvidia's GPUs have maintained a dominant position in AI data center operations since they drive next-level AI processing for massive companies. According to analysts at Cantor DeepSeek, this technical breakthrough represents the potential for "peak spending" in Nvidia's GPU market.
The announcement follows Nvidia's brief position as the world's most valuable publicly listed company and demonstrates the unpredictability of the AI-driven market along with the escalating worldwide competition.
This article first appeared on GuruFocus.