On Monday, a Chinese AI application sent shockwaves across the global tech industry. Emerging as one of the most popular AI platforms, this new player, Deepseek, is being viewed as a formidable alternative to ChatGPT, OpenAI, and Meta. Developed by a Chinese startup, Deepseek has triggered widespread concern among leading AI firms due to its unprecedented strategy—offering its entire suite of services for free.
A Major Blow to Nvidia and AI Stocks
The arrival of Deepseek has had the most significant impact on Nvidia, one of the world’s leading AI and semiconductor companies. Within just two days of its launch, Nvidia’s stock plummeted by over 20%, wiping out a staggering $600 billion from its market capitalization.
The financial turmoil extended beyond Nvidia, affecting the world’s wealthiest individuals. On January 27 alone, the collective wealth of the top 500 billionaires shrank by a jaw-dropping $108 billion (approximately INR 9.3 lakh crore). AI and tech industry leaders bore the brunt of this downturn, experiencing massive financial losses.
Billionaires Take a Hit
Among those most affected was Nvidia’s co-founder, Jensen Huang, whose personal fortune took a $20.1 billion hit. However, the steepest loss was suffered by Oracle’s co-founder, Larry Ellison, who saw his net worth plummet by $22.6 billion.
Other high-profile billionaires also faced substantial losses:
- Michael Dell (Founder, Dell Technologies) – Lost $13 billion.
- Changpeng Zhao (Co-founder, Binance) – Lost $12.1 billion.
In total, tech-sector billionaires saw their combined wealth decline by a staggering $94 billion in a single day.
Winners Amidst the Chaos
Despite the turmoil, not all tech moguls faced losses. Some industry leaders actually saw their wealth increase:
- Mark Zuckerberg (CEO, Meta) gained $4.3 billion.
- Jeff Bezos (Founder, Amazon) saw his fortune rise by $632 million.
These gains were attributed to shifts in investor confidence, with companies like Meta and Amazon benefiting from market fluctuations.
Stock Market Turmoil: AI Giants Feel the Pressure
Following Deepseek’s launch, the impact was felt immediately across major stock markets. On Monday:
- The Nasdaq Composite Index fell by 3.1%.
- The S&P 500 Index also witnessed a sharp decline.
This downturn placed immense pressure on the shares of leading tech companies, including:
- Nvidia
- Meta (Facebook)
- Alphabet (Google)
- Microsoft
The Ripple Effect on Indian Markets
The shockwaves from Deepseek’s debut were not confined to global markets; Indian stocks also experienced significant losses:
- Anant Raj Limited – Shares dropped 20% on Tuesday, following a 17% decline the previous day.
- Netweb Technologies India Limited – Shares fell by 10%, after an 11% drop on Monday.
- Zen Technologies – Stock value dipped by 14%, following a 6% decline the day before.
The Road Ahead: How AI Giants Will Respond
The introduction of Deepseek has sparked intense discussions about the future of AI and the sustainability of its business models. With a free-to-use AI platform disrupting established players, companies like OpenAI, Meta, and Microsoft must rethink their strategies to stay competitive. The dramatic losses in stock value and billionaire wealth indicate that the AI industry is undergoing a seismic shift—one that could redefine the future of artificial intelligence.
As Deepseek continues to gain traction, the coming months will reveal whether this Chinese AI disruptor is a temporary storm or a long-term game-changer in the world of artificial intelligence.
