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Nvidia Shares Drop 13.5% in Premarket, Losing $516 Billion in Largest Single-Day Drop in History

Jan 27, 2025, 01:21 PM

Nvidia Corp. experienced a significant drop in its stock price, falling as much as 13.5% in premarket trading, triggered by a global tech sell-off following the launch of DeepSeek, a Chinese AI startup. DeepSeek's introduction of a free, open-source large-language model, developed in just two months at a cost of under $6 million, has raised questions about the efficiency and cost-effectiveness of AI development, particularly challenging Nvidia's dominance in the AI chip market. The sell-off led to Nvidia losing up to $516 billion in market value, marking the largest single-day stock market valuation drop in history. Other tech companies, including Microsoft, Meta, and Tesla, also saw declines in their stock prices, reflecting broader concerns about the future of AI investment and the competitive landscape. DeepSeek's model, which includes a reasoning model, has been noted for its competitive performance despite its lower development costs.