Nvidia's Market Value Plummets by $600 Billion Amid Threat from Chinese AI Startup

US
Published:

In a significant downturn for the tech industry, shares of American chip-maker Nvidia fell nearly 17 percent on Wall Street on Monday, resulting in a staggering loss of nearly $600 billion in market value. The decline was triggered by the emergence of DeepSeek, a Chinese startup that has developed a low-cost generative AI model, posing a challenge to U.S. dominance in the AI sector.

The DeepSeek chatbot, which became the top-rated free application on Apple’s U.S. App Store, reportedly cost only $5.6 million to develop, a fraction of the billions invested by American tech giants. The market response was swift, with the tech-heavy Nasdaq index dropping more than three percent. Other major players also felt the impact, with shares of Broadcom falling 17.4 percent and ASML down 6.7 percent.

Market analysts expressed concern over DeepSeek's potential to disrupt the AI landscape, with Kathleen Brooks, research director at trading platform XTB, noting that the situation signals a challenge to U.S. tech supremacy. Art Hogan, chief market strategist at B. Riley Wealth, stated that the market reacted cautiously, with skepticism regarding the Chinese company’s claims.

DeepSeek, meanwhile, announced it would limit user registrations due to malicious cyberattacks targeting its services. As the tech sector grapples with these shifts, major companies like Meta and Microsoft are set to report their earnings, potentially shedding light on the evolving competitive landscape.

Weekly Newsletter

News summary by melangenews

Loading...

More from United States

Trump Threatens BRICS Nations with 100% Tariff Over US Dollar Replacement

In a bold statement on January 30, 2025, U.S. President Donald Trump issued a warning to the BRICS nations—Brazil, Russia, India, China, and South Africa—threatening to impose a 100% tariff if they pursue the creation of a new currency or support alternatives to the US dollar. Trump emphasized the need for commitments from these countries to refrain from actions that could undermine the dollar's dominance in international trade. The remarks came amidst ongoing discussions about the BRICS alliance potentially moving away from reliance on the US dollar. According to Trump, the notion that these countries could attempt to replace the dollar without consequence is no longer viable. He posted on his Truth Social platform, asserting that the U.S. government would require a clear commitment from BRICS members against such initiatives. This escalation of rhetoric highlights the ongoing tensions surrounding global currency standards and the U.S. position in international economic affairs.
US

Walgreens Stops Dividend Payments for First Time in 92 Years Amid Financial Challenges

Walgreens Boots Alliance has announced the suspension of its quarterly dividend payment to shareholders, marking the first time in 92 years that the company has opted not to distribute cash dividends. The decision, reported on January 30, 2025, comes as the Deerfield-based retail pharmacy faces ongoing financial difficulties. In an effort to streamline operations, Walgreens plans to close approximately 1,200 stores over the next three years, including locations in Chicago. The company has been implementing cost-cutting measures, which include recent layoffs in Illinois and other regions. According to Walgreens, the suspension of dividends is designed to assess and refine its capital allocation policy as part of a broader turnaround strategy. A company release emphasized that cash needs associated with litigation and debt refinancing critically influenced the decision. Walgreens reported a substantial net loss of $265 million in the first quarter of this year, in stark contrast to a loss of $67 million in the same quarter the previous year.
US

Costco to Raise Hourly Wages for US Workers to Over $30

Costco Wholesale has announced plans to increase hourly pay for most of its U.S. store workers to over $30, according to a memo distributed to employees this week. The wage hike will implement a $1 increase annually for the next three years, beginning with a rise to $30.20 in the first year. Additionally, workers at the bottom of the pay scale will see their wages increase by 50 cents to $20. This decision comes amid contract negotiations between Costco and the Teamsters union, which represents over 18,000 employees. The union recently revealed that 85% of its members voted in favor of a nationwide strike as talks approach a January 31 deadline. Costco emphasized in the memo, signed by CEO Ron Vachris, that the changes would ensure that their hourly wages and benefits continue to surpass those offered by competitors in the retail industry. As labor relations become increasingly contentious across various sectors, this move may help Costco maintain its workforce and improve employee morale.
US
All United States News ->