Its time for a new group of investors to make that USD108 Billion after DeepSeek drama settles
News just on that the world’s 500 richest people have collectively lost USD108 billion on Monday this week as a tech-driven sell-off tied to Chinese AI developer DeepSeek sent major stocks plunging. DeepSeek is a Hangzhou-based (China) AI developer.
The top billionaires tied to Artificial Intelligence (AI) technology suffered the most significant losses.
Starting with Nvidia co-founder Jensen Huang who saw his fortune shrink by USD20.1 billion, which is a massive a 20 percent drop, while Oracle co-founder Larry Ellison lost USD22.6 billion, equivalent to 12 percent of his wealth.
Other major losses included Michael Dell with a USD13 billion loss and well known Changpeng “CZ” Zhao of Binance taking a downturn of USD12.1 billion.
Tech giant NVIDIA lost USD593 billion in a single day, causing it to fall from the world’s most valuable company to the third position.
So why is this happening? Well, well established American AI tech companies are facing instability this week due to Chinese AI company DeepSeek releasing a much better version at a way lower cost. Recently, DeepSeek launched a new AI-powered chatbot that rivals ChatGPT.
According to DeepSeek claims, this model is even more advanced than ChatGPT and was trained using NVIDIA GPUs at a cost of only USD5.6 million, which is significantly lower than the costs incurred by major tech companies for training their models.
Moreover, since the model is open-source, it has gained immense popularity among users. Companies like Tesla, Meta, and OpenAI heavily rely on NVIDIA’s GPUs to train their AI models, spending vast amounts of money.
NVIDIA has been at the center of the AI boom, which caused its stock price and market value to skyrocket, making it the world’s most valuable company for a time.
However, after DeepSeek released its Large Language Model (LLM), American AI companies started fearing a loss of dominance. Although DeepSeek also used NVIDIA GPUs for training, they did so at a cost of only USD5.6 million, proving that major companies can train their models with significantly lower GPU expenses.
This realization caused a massive drop in NVIDIA’s stock price. So to recap, this week Monday, NVIDIA lost nearly 17 percent of its market cap, or USD593 billion, bringing its valuation down from USD3.5 trillion to USD2.9 trillion. As a result, NVIDIA suddenly dropped from the world’s most valuable company to the third place.
The tech sector accounted for 85 percent of the total wealth decline, with the Nasdaq Composite Index falling a massive 3.1 percent and the S&P 500 dropping 1.5 percent.