It is a bloodbath on Wall Street as some of the biggest tech companies in the world are seeing billions being wiped out of their market cap, thanks to DeepSeek, a Chinese AI startup that took the world by storm last week.
Jensen Huang, the co-founder of Nvidia, the second-most valuable company in the world, is one of the biggest losers as the world¡¯s 500 richest people lost a combined $108 billion on Monday.
According to the Bloomberg Billionaires Index, Huang's net worth fell by as much as 20%, or $20.1 billion, as the low-cost open-source chatbot sent panic across the tech world and among investors.
Oracle Corp. co-founder Larry Ellison lost $22.6 billion, which is equivalent to 12% of his fortune, while Dell Inc.¡¯s Michael Dell lost $13 billion, and Binance Holdings Ltd. co-founder Changpeng ¡°CZ¡± Zhao lost $12.1 billion.
Shares of Nvidia sank 17% on Monday, wiping $593 billion from the chipmaker's market value, a record one-day loss for any company.
Nvidia, whose most advanced chips are used by almost all tech companies to train their LLMs, had until now enjoyed a monopoly in the market.
Unlike other LLMs, including ChatGPT, Meta's Llama, and Google's Gemini, DeepSeek was trained on Nvidia's lower-capability H800 chips and cost less than $6 million, a fraction of what the US tech giants spent on training their LLMs.
While most of Nvidia's latest and most powerful chips are not accessible to Chinese companies due to a trade ban imposed by the US, the lower-capability H800 chips are not.
Despite not being able to buy the most cutting-edge chips, DeepSeek, founded in 2023 in Hangzhou, China, has managed to make a chatbot which many in the tech industry say is as good as ChatGPT. DeepSeek also made the deal sweeter for developers by making its R1 model open-source.
The unexpected Chinese entry into the AI race has also posed an existential threat to the $500 billion AI investment by OpenAI, Oracle, and SoftBank that Trump announced in his first week in the White House.
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