On Monday, 27 January 2025 the US market saw the stock value of the giant tech company Nvidia tumbling by a mind-boggling 16 per cent, wiping out a staggering $600 billion in a single trading session. A Chinese start-up, DeepSeek declared that its large language model achieved a performance close to the OpenAI with fewer chips. That was enough for bears to chase the bulls away from all tech stocks. The market went berserk and bleeding a week after OpenAI and SoftBank announced a plan to invest $500 billion. The US techies have smelt something rotten behind the Deep Seek, which leveraged the latest model of OpenAI to cut its cost. A couple of days later, OpenAI said it had evidence of DeepSeek’s use of its proprietary to train its language model.
The news rattled the traders in Nvidia stocks. This forced investors in the AI chips to reassess their decisions. The Dutch semiconductor maker ASM International also lost 12 per cent of its value. Microsoft lost 3.6 per cent, and the European chip equipment maker ASML lost 6.3 per cent. The US was always wary about the Chinese’ capability to overtake the US in terms of cost. Last year, Biden imposed a stringent curb on chip exports to China.
