SANTA CLARA, CA — At approximately 9:31 a.m. Eastern on Monday, roughly $600 billion in Nvidia market capitalization was reclassified from ‘the future of human civilization’ to ‘a rounding error,’ after a Chinese startup called DeepSeek released an AI model that does basically the same thing using, by some estimates, the computing budget of a mid-sized Panera franchise.
The loss is the largest single-day vaporization of shareholder value in U.S. history, a record previously held by Nvidia last Thursday. Analysts struggled throughout the morning to explain how a company whose entire investment thesis was ‘nobody else can do this’ suddenly faced a company that, by all appearances, had done this.
‘This is actually a healthy and rational price discovery event,’ said Parth Willoughby, a senior semiconductor strategist at Brennan-Koffel Capital, whose firm held Nvidia at a $200 price target as of Friday and a $140 price target as of lunch. ‘We’re simply reweighting for the possibility that the entire American AI buildout was based on the assumption that math is harder in Mandarin.’
DeepSeek, which reportedly trained its flagship model for around $6 million using a stack of export-restricted chips and what insiders describe as ‘a lot of cleverness,’ has become the top free download in the Apple App Store, briefly edging out ChatGPT, Threads, and the app that tells you when the ice cream machine at McDonald’s is broken. The company employs fewer people than a regional Chick-fil-A.
By contrast, OpenAI, Microsoft, Google, Meta, and Amazon have between them announced roughly $320 billion in planned 2025 AI infrastructure spending — a figure arrived at, sources say, by taking the previous year’s number and adding the word ‘more.’ Sam Altman, whose Stargate project was unveiled last week at a White House ceremony and pegged at $500 billion, issued a statement on X calling DeepSeek ‘impressive’ in the same tone one uses to describe a cousin’s unsolicited screenplay.
Wall Street spent the morning cycling through the five stages of grief, though most firms skipped directly to ‘reaffirming our Buy rating.’ Morgan Stanley issued a note titled ‘Nothing Has Changed,’ which was 14 pages long and contained the word ‘moat’ 31 times. Goldman Sachs downgraded Nvidia from ‘Conviction Buy’ to ‘Still Definitely Buy, Please.’
‘The fundamental bull case for Nvidia remains intact,’ said Lindsay Oberholtzer, chief market strategist at Halverson-Pike Advisors, from what appeared to be a closet. ‘We simply need to understand that artificial general intelligence may not require ten nuclear power plants and the entire desert of Arizona, which, if true, would be an absolute catastrophe for our thematic ETFs.’
The ripple effects spread quickly. Constellation Energy, which had soared in 2024 on the theory that AI would consume every electron in North America, fell 21% by midday. Vistra Corp lost 28%. Three separate nuclear reactor projects announced last quarter were reportedly re-categorized by their sponsors from ‘urgent strategic infrastructure’ to ‘something we’ll circle back on.’
Retail investors on r/wallstreetbets responded with characteristic sobriety, flooding the subreddit with posts ranging from ‘BTFD’ to screenshots of six-figure losses captioned ‘guh.’ One user, u/GPUPilled_420, claimed to have lost his wife’s dental practice on 0-day Nvidia calls and asked if anyone knew whether DeepSeek could draft a divorce filing.
In Washington, lawmakers reacted to the sudden emergence of a competitive Chinese AI lab by blaming each other for it. Senator Josh Hawley demanded hearings. Senator Elizabeth Warren demanded different hearings. The Commerce Department announced it would review whether export controls had ‘worked,’ a review expected to conclude with the finding that export controls had, in some sense, worked, and in another, more important sense, not.
President Trump, asked about the selloff while boarding Marine One, said DeepSeek was ‘a wake-up call’ and also ‘a tremendous opportunity’ and also ‘something I’ll be looking at very strongly,’ before adding that he had personally invented the chip. Press Secretary Karoline Leavitt later clarified that the President was referring to Lay’s.
Jensen Huang, Nvidia’s CEO, was unavailable for comment, reportedly because he was on a previously scheduled trip to Beijing, where he is visiting customers who, he has said repeatedly, desperately need the chips he is being prevented from selling them.
By the closing bell, Nvidia had stabilized down ‘only’ 17%, a level executives described as ‘encouraging’ and retirees described as ‘the reason I’m greeting at Lowe’s now.’ In after-hours commentary, Willoughby of Brennan-Koffel reiterated his firm’s conviction that the AI boom remains in its very earliest innings, a position he has held through approximately nine innings.