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The stock market was sent reeling earlier this week as Chinese AI startup DeepSeek unleashed chaos, triggering a $1 trillion tech selloff that erased $600 billion from Nvidia’s (NVDA) market value in a single day. The shockwaves came after DeepSeek revealed a ChatGPT competitor developed for just $6 million - a fraction of the hundreds of billions that U.S. tech giants plan to invest in AI.
On Jan. 27, Nvidia shares plunged around 17% as investors panicked about this budget AI breakthrough. The tech selloff intensified as other major players like Microsoft (MSFT) and Alphabet (GOOGL) saw their shares tumble. “Investors have extrapolated way too far, too fast about what's happening [with DeepSeek's AI progress],” cautioned Jim Thorne of Wellington-Altus in a Tuesday MarketWatch interview, noting the broader market’s resilience beyond AI.
