The recent release of DeepSeek AI, a product of a Chinese startup, has sent ripples through global financial markets, leading to a significant decline in Nvidia’s stock value. Nvidia’s shares tumbled by 17%, erasing a record $600 billion from its market capitalization in a single trading session. This marks one of the steepest one-day losses in U.S. stock market history. At the core of this dramatic sell-off is investor concern over the competitive threat posed by DeepSeek’s cost-efficient and energy-saving AI model, which appears capable of rivaling Western heavyweights like OpenAI’s ChatGPT and Meta’s AI advancements.
DeepSeek’s model stands out for its efficient use of less advanced hardware, reportedly leveraging Nvidia’s older A100 GPUs, despite U.S. restrictions on exporting cutting-edge chips to China. This innovation has raised critical questions about future demand for high-performance AI chips, a market Nvidia has dominated. The rollout has also sparked broader doubts about whether the high spending by U.S. tech companies on AI infrastructure is sustainable or justified, given that smaller-scale alternatives could potentially achieve similar results.
The repercussions extend beyond Nvidia, with other AI-dependent firms and energy-related stocks also experiencing declines.
Nvidia Stock News: A Historical Perspective
Nvidia Corporation, known worldwide as a trailblazer in graphics processing and AI development, has grown from its 1993 founding into one of the most influential tech companies globally. From enabling advances in gaming to driving the future of artificial intelligence (AI), Nvidia has set multiple benchmarks in its 30-year history.
The Early Years and Rise to Tech Dominance
Nvidia’s Founding and Initial Success
Nvidia Corporation was founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, with a vision to revolutionize computing through graphics. Its first major breakthrough came in 1999 with the invention of the GeForce 256 GPU, which laid the foundation for modern graphics cards. Over the next decade, Nvidia grew its portfolio to include high-performance processing hardware for gaming, design, and visualization.
Expansion into AI and Data Centers
By the late 2010s, Nvidia pivoted toward artificial intelligence, leveraging its GPUs to power deep learning technologies. Its CUDA platform transformed GPUs into tools for machine learning workloads, positioning Nvidia at the forefront of AI innovation. During the 2020s, the company expanded further into data center operations, IoT applications, and autonomous vehicles, enabling its rapid market cap growth.
Key Milestones in Nvidia’s Recent History
Nvidia in 2024
Nvidia began 2024 as one of the most valuable companies globally. Its GPUs dominated the AI market, becoming essential for training large language models such as OpenAI’s ChatGPT and Meta’s LLaMA. By mid-2024, Nvidia’s stock price history reflected steady growth, benefiting from soaring AI demand. However, Nvidia stock price before the latest valuation peak showed moments of volatility tied to the cyclical nature of tech investments.
Despite delivering record-breaking earnings, geopolitical tensions escalated when the U.S. restricted the export of Nvidia’s high-end chips to China. These barriers aimed at limiting China’s AI advancements further cemented Nvidia’s critical role in the sector while exposing vulnerabilities tied to its dependency on global markets.
Why is Nvidia Stock Going Down Today
The crucial year of 2025 presented both challenges and opportunities. Nvidia started strong, posting gains fueled by the adoption of its advanced GPUs in generative AI and autonomous technologies. Yet, in January, the release of DeepSeek AI by a Chinese startup shook Nvidia’s foothold, wiping out $600 billion in market value in just one trading session. Analysts scrambled to address “why is Nvidia stock going down today,” as fears over DeepSeek’s efficiency dampened investor confidence.
While Nvidia responded optimistically to DeepSeek by maintaining its leadership role in AI infrastructure, the stock market shock intensified debates about the company’s long-term prospects. Nvidia stock prediction today became subject to scrutiny, with price targets for 2025 fluctuating under pressure.
DeepSeek AI’s Impact on Nvidia
DeepSeek AI has emerged as a clear disruptor in the AI industry. This cost-efficient, energy-saving model not only threatened Nvidia’s dominance but also opened opportunities for competitors to reevaluate the economic dynamics of AI hardware. Key questions dominate public discourse, including on Reddit forums, where “DeepSeek Nvidia price” and “DeepSeek Nvidia Reddit” threads discuss the tech’s implications.
Did DeepSeek Use Nvidia?
Yes. Despite U.S. export restrictions, DeepSeek reportedly leveraged Nvidia’s older A100 GPUs, showcasing how legacy hardware can still deliver astounding AI capabilities.
What Is NVDA Saying About DeepSeek?
Nvidia acknowledged DeepSeek’s achievement, praising the model as an innovation that highlights the flexibility of its hardware. However, the company underscored that high-performance AI tasks will continue to require its cutting-edge GPUs.
Is DeepSeek a Chinese Company?
Yes. DeepSeek is a privately held Chinese AI company founded in 2023 by Liang Wenfeng. The startup shocked global markets with its low-cost AI approach.
What Chip Is DeepSeek Using?
DeepSeek operates on Nvidia’s older A100 GPUs, specifically chips previously stockpiled by its founder before export restrictions came into play.
Why Did Nvidia Plummet?
The dramatic decline in Nvidia’s market cap followed fears that DeepSeek’s energy-efficient and cost-effective model could reduce global demand for high-performance GPUs.
Is DeepSeek AI Free?
Yes. DeepSeek launched its service as a free and open-source application, further enhancing its accessibility and creating unprecedented user adoption.
What Is Unique About DeepSeek?
DeepSeek employs inference-time computing, activating only relevant portions of its AI model for specific tasks. This efficiency reduces energy consumption and computational costs, setting a new benchmark for AI models.
What Companies Use Nvidia AI?
Nvidia’s AI hardware and software are integral to tech giants like OpenAI, Microsoft, Meta, and Tesla. Enterprises in finance, healthcare, and climate analysis also rely heavily on Nvidia GPUs to enable real-time data processing and modeling.
Nvidia Stock Performance and Market Outlook (2025)
Nvidia Stock Price Chart and Predictions
The Nvidia stock price history reveals a trajectory of impressive gains punctuated by occasional disruptions. Following the DeepSeek shock, Nvidia stock price targets for 2025 have become highly debated among analysts. While some see the pullback as an overreaction, others warn of potential headwinds in demand.
NVDA 6-month Chart
Future Challenges and Opportunities
Nvidia’s immediate challenge lies in recalibrating to compete in a space where efficiency may trump brute force. Yet, the persistence of AI infrastructure needs, combined with Nvidia’s deep integrations into industry ecosystems, underpins its resilience. Investors actively track “Nvidia stock prediction today” for clarity on short- to medium-term strategies.
Closing Thoughts
Despite the turbulence caused by DeepSeek AI, Nvidia Corporation remains a pivotal player in the AI and tech sectors. From its groundbreaking GPUs to its crucial role in AI innovation, Nvidia’s adaptability and historical success suggest it can overcome present challenges. However, its ability to rethink AI hardware strategies and maintain investor confidence will determine whether it retains its crown in the rapidly evolving generative AI industry.
Disclaimer:
All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.
