$465 billion. That is how much market value Nvidia lost in a single trading session, more than any company in the world had ever shed in one day. The week ranks among the most volatile in the chipmaker’s stock market history, and the spark came from an unexpected place: DeepSeek, a Chinese startup that has forced the entire AI industry to rethink its assumptions.
How a Chinese Startup Rattled the AI Trade
DeepSeek is headquartered in Hangzhou, a city in eastern China with one of the country’s densest clusters of tech firms. What caught markets off guard was the price tag: the company developed its model for roughly $5.6 million, about 1% of what America’s largest companies spend on AI research and development.
It was also built using a fraction of the chips its Western rivals rely on. That undercut one of the sector’s founding assumptions, namely that whoever owns the best chips wins the AI race.
Investors drew a harsh conclusion. If capable AI can be built this cheaply, the billions U.S. tech giants are pouring into it become much harder to justify. Valuations lifted by years of enthusiasm for computing power suddenly came under pressure.
Wall Street Takes a Hit
Nvidia’s stock sank 13% on the Nasdaq that day. A stock plunge, an antitrust probe and doubts about its AI dominance: those three fronts sum up the storm Nvidia is weathering. Until this session, the record for the biggest one-day loss of market value belonged to Facebook parent Meta, which erased $251 billion in early 2022 as its metaverse ambitions unraveled.
The rest of Big Tech followed it lower. Microsoft fell 4.36%, Alphabet 3.36%, Amazon 3.32% and Meta 1.89%. The broader Nasdaq lost 3.20% and the S&P 500 slid 1.77%, while the Dow Jones held up better with a 0.21% dip.
In the bond market, the reaction ran the other way as money rushed into safe havens. The 10-year Treasury yield dropped to 4.53% from 4.62% a day earlier.
From Amsterdam to Tokyo: A Global Selloff
European markets felt the shock too, with every major exchange in the red: Amsterdam fell 1.33%, Frankfurt 0.71%, Paris 0.31% and London 0.07%. Chip and AI infrastructure names took the brunt. ASML lost 8.65%, ASM International 8.49%, BE Semiconductor 6.99%, Soitec 4.37% and Infineon 3.22%.
The selling also reached the companies that supply power and equipment to data centers. Schneider Electric dropped 9.22% and Legrand 5.86%, while Siemens Energy suffered the steepest fall, more than 20%. Doubts about AI now extended to the whole infrastructure chain, from energy to cables to electrical gear.
In Tokyo, Nvidia supplier Advantest lost 8.61%, Fujikura 8% and SoftBank 6.09%. All three are tied, directly or indirectly, to demand for AI chips and data center equipment.
Regulators Close In
DeepSeek is not Nvidia’s only headache. The U.S. Department of Justice (DOJ) has launched an antitrust investigation into the company after rivals alleged that it may have abused its dominant position in the AI chip market.
The stock was already under pressure before the probe became official. It had dropped 6.7% in one New York session, leaving it 22% below its June peak, and the DOJ news knocked off another 2.3% in Frankfurt trading shortly after.
France is running its own case. The Autorité de la concurrence, the French competition regulator, is investigating suspected anticompetitive practices at Nvidia. The investigation is in its final stage, but it will not necessarily end in penalties: investigators first have to decide whether to issue formal objections, and only then can the authority’s board rule.
Is Nvidia’s AI Lead at Risk?
Behind those three fronts lies a more fundamental question: how long can Nvidia remain the essential player in AI?
For now, Nvidia is still the world’s most valuable listed company. Its GPUs run inside the data centers of the biggest tech groups on the planet, and its technical edge is genuine. Yet its business model was built on one premise, that computing power is the decisive advantage, and DeepSeek has started to chip away at it.
Nvidia rarely falls alone. In an earlier bout of volatility, AMD dropped 7.8%, Intel 8.8%, Broadcom 6.2% and Qualcomm 6.9% in its wake, a reminder that the whole semiconductor ecosystem is exposed whenever the AI story is questioned.
The timing did not help. The week of the Nasdaq slide was also earnings week for Microsoft, Meta, Tesla and Apple, which only sharpened investors’ nerves about AI spending and when it will pay off.
What It Means for Investors
Our advice: don’t mistake short-term volatility for a structural trend. Nvidia’s position remains strong, but competition is broadening, and the sector is entering a period of deep reassessment of its fundamentals.
