On Monday, January 27, Nvidia’s market capitalization decreased by almost $600 billion which is a record one-day drop in the history of companies based in the United States.
The value of the mentioned firm’s shares declined by 17% on Monday. The corresponding indicator closed at the $118.58 mark. The last Monday of the first month of 2025 turned out to be Nvidia’s worst day since March 16, 2020, when the coronavirus pandemic started, which became a global shock factor for the economy and an unforeseen circumstance that significantly disrupted the functioning of international supply chains.
It is worth noting that recently the mentioned company has been in a phase of its history that can be described as something like an impeccable and, in a certain sense, absolute success. Nvidia is one of the main beneficiaries of the so-called artificial intelligence boom on a global scale. The company develops graphics processing units, which are necessary for training and ensuring the subsequent operation of machine intelligence systems. Nvidia is the most popular supplier of corresponding products. Graphics processing units can be described as a critically important basic material element, without which the evolution of the artificial intelligence industry is impossible. Last year, Nvidia’s market capitalization crossed the historical mark of $3 trillion. Against this background, the company has become one of the most valuable in the world. Last week, Nvidia again demonstrated by its example what success is. Shortly before the definitely gloomy Monday, the company surpassed Apple in terms of market capitalization, becoming the most valuable publicly traded brand in the world.
The downward dynamic of Nvidia securities on Monday caused the high-tech Nasdaq to fall by 3.1%.
Western stocks of technology companies were on sell-off on January 27. There is rapidly growing concern in the markets that the Chinese artificial intelligence laboratory DeepSeek is becoming an increasingly strong and competitive player in the global AI industry. Also noteworthy in this case is the fact that the developer of machine intelligence poses a sensitive and unambiguously noticeable challenge to US companies of a similar profile. It is worth noting that leadership in the artificial intelligence industry is currently a goal that Washington positions as one of the most important at the official level. In this context, it is worth mentioning that last week the President of the United States Donald Trump signed an executive order aimed at ensuring that the relevant goal is achieved, which is already a fact of reality but faces various challenges, including in the context of global competition. DeepSeek’s success can also be described as Beijing’s move forward in the development of the domestic advanced technology sector amid increasing tensions in relationships with Washington.
Last month, the mentioned artificial intelligence lab unveiled a free, open-source large language model. DeepSeek stated that the development of the specified model lasted only two months. It is also known that less than $6 million was spent on the implementation of the relevant project. During the development of the large language model, Nvidia H800s chips with limited capabilities were used. There is no clear answer to the question of whether this fact contains what can be called the irony of the being. At the same time, it is clear that the use of the mentioned chips by DeepSeek highlighted Nvidia’s major global role as the main supplier of corresponding products.
It is worth mentioning that the United States has restricted shipments of advanced microcircuits and equipment for manufacturing chips of the specified category to China. Washington stated that these measures were taken for reasons of national security. At the same time, it was obvious that the mentioned solution would limit China’s technological potential. The success of DeepSeek does not signal that restricting the export of advanced chips has no consequences, but at the same time demonstrates that the Asian country can make progress as part of its efforts to develop artificial intelligence.
Against the background of Washington’s export curbing against Beijing, the media published information about Nvidia’s intention to launch the production of special chips for the Chinese market, the presence in the space of which means access to a significant revenue source for foreign companies. At the same time, these restrictions did not become an obstacle for the mentioned firm on the way to last year’s success, which is most probably to continue this year, despite a very unsuccessful Monday. The development of the artificial intelligence industry continues and is highly likely to continue. Nvidia is the main supplier of a kind of material resource for the corresponding technological evolution. For this reason, the company has generally positive prospects, and the decline in its market capitalization is likely to be temporary. The materialization of the logic of technological progress is stronger than bursts of success, despite their enormity. This thesis applies to Nvidia since there is nothing improbable or fantastic in assuming that the company’s competitors will become much stronger over time. However, so far this is a distant prospect and rather a strictly hypothetical vision of what can be materialized, but at the same time is not an obvious and even potentially approaching reality in a practical plane.
Nvidia’s products currently dominate the market of artificial intelligence data center chips. It is worth noting that the functioning of AI systems requires significant computing power. Nvidia’s clients include technology giants such as Amazon, Meta, and Alphabet. These companies are spending billions of dollars on processors needed for training and running artificial intelligence models.
Cantor analysts wrote in their report published on Monday that the release of Deepseek’s latest technology provoked great angst about the impact on computing demand and therefore fears about peak spending on graphics processing units. In their opinion, the relevant point of view is extremely far from the truth. Analysts expect that the advancements in artificial intelligence are likely to lead to the AI industry wanting more computing, not less. They recommend buying shares of Nvidia. In 2023, the company’s securities rose in price by 239%. Last year, this indicator increased by 171%. At the same time, the market is on edge about any possible pullback in spending.
As it was above mentioned on Monday, the entire technology sector of the United States, not just Nvidia, faced a rapid downward dynamic. The value of shares of Broadcom, another major US chip manufacturer, fell by 17%. Against the background of the artificial intelligence boom, the company’s market capitalization began to approach $1 trillion last month. On Monday, the mentioned figure dropped by $200 billion.
Data center companies reliant on Nvidia’s graphics processing units for their hardware sales also faced big sell-offs on January 27. Securities of brands such as Dell, Hewlett Packard Enterprise, and Super Micro Computer fell by at least 5.8%. The value of shares of Oracle, one of the participants in the initiative of the President of the United States in the area of artificial intelligence, decreased by 14%.
For Nvidia, the loss recorded on Monday was more than double the September drop in the company’s market capitalization by $279 billion. At that time, it was the biggest one-day decrease in market value. In 2022, Meta set a kind of record for losses. At that time, the market capitalization of this technology giant decreased by $232 billion. Before this, Apple had demonstrated the sharpest drop in market value. In 2020, the corresponding figure decreased by $182 billion.
The amount of Nvidia’s drop on Monday is more than twice the market value of Coca-Cola and Chevron. This indicator is also higher than the market capitalization of both Oracle and Netflix.
Nvidia’s chief executive officer Jensen Huang’s net worth also turned out to be on a downward trajectory. The corresponding figure decreased by about $21 billion.
Nvidia is currently the third most valuable public company, behind Apple and Microsoft.
The sudden excitement around DeepSeek over the weekend caused its app to overtake OpenAI’s ChatGPT as the most downloaded free app in the United States on Apple’s app store.
Venture capitalist David Sacks, who was tapped by Donald Trump to be the White House’s AI and crypto czar, posted a message on the social media platform X stating that the model developed by DeepSeek shows that the artificial intelligence race will be very competitive. Also in this context, it was noted that Mr. Trump was right to rescind the executive order of former United States President Joe Biden on AI safety last week. David Sacks is confident that the US can’t be complacent. The relevant statements, which are not some kind of isolated opinion or unpopular point of view, highlight the fact that the artificial intelligence industry is gradually becoming or has actually become a space of geopolitical rivalry. AI has significant potential. Artificial intelligence has already demonstrated high-quality abilities related to processing huge amounts of information, including as part of an analytical approach to the implementation of relevant activities, and generating original content based on user prompts. AI is also already being used as a working tool in some industries. It is highly likely that this scenario of applying artificial intelligence will scale and become more diverse. The corresponding perspective means that AI can transform into a new means of production, which will have revolutionary significance for the economy and the world as a space of existence of human civilization as a whole. However, this is not the only impressive aspect of the supposed potential of artificial intelligence. Some futurological forecasts suggest that in the course of its technological evolution, AI will transform into an autonomous form of consciousness that exists in the digital dimension, capable of independent development and surpassing the human mind in terms of cognitive abilities. It is possible that virtual thinking systems will become a new stage of global intellectual evolution and move forward in the knowledge and research of the world as an all-encompassing space of the universe. These prospects are almost a guarantee of continued development of the AI industry. So far, this is the most promising path of progress in the broad sense of the term.
It is worth noting that against the background of the intensive development of artificial intelligence, the issue of cybersecurity is relevant. Scammers also have access to AI tools, which is why their activities have become more sophisticated. To counteract the corresponding threat in the cyber environment, personal awareness of users is important. For example, an Internet search query such as how to know if my camera is hacked will allow anyone to get information about signs of unauthorized access to the device. Digital literacy is an effective tool for combating cybercrime.
