DeepSeek costs US tech companies more than $1 trillion in 24 hours

The total losses of tech companies due to the impact of DeepSeek are estimated at about $1 trillion in the US market. The biggest loser was Nvidia, the chip giant, which lost $600 billion in its market value in one day, the largest daily decline in its history. Shares of other tech companies such as Microsoft, Google and Amazon also declined, as these companies collectively lost hundreds of billions due to investors’ fears that DeepSeek technologies will reduce demand for existing artificial intelligence infrastructure and lower operating costs, which could affect their future revenues.

The Nasdaq 100 fell 3% on Monday, its biggest drop in six weeks, leaving it almost flat for the year and worth about $1 trillion less than on Friday. Energy companies, which were expected to benefit from unprecedented demand for AI, fell, led by a 21% drop.

 The main concern with DeepSeek’s sudden emergence is that it operates on an advanced AI model that costs much less to operate than competing US models offered by Nvidia, which raises a bigger question about the value of the billions of dollars invested by US companies, if there are models that operate on the same cost as DeepSeek, which is estimated to cost only $6 billion.

It is worth noting that US President Donald Trump had launched a $500 billion project days before the emergence of DeepSeek to create an artificial intelligence infrastructure in the United States led by the Japanese SoftBank Group and OpenAI and ChatGPT companies. US President Donald Trump said after the sudden emergence of the Chinese application, “We hope that the launch of DeepSeek AI from a Chinese company will be a wake-up call for the need for our industries to focus sharply on competition to win.”

DeepSeek was founded in late 2023 by Liang Wenfeng, and launched the first language model for artificial intelligence in 2024. Download requests for DeepSeek exploded around the world within days. According to Reuters, most of DeepSeek’s employees today are graduates and doctoral students from the best universities in China, who Liang believes would prefer to work for DeepSeek because it addresses the biggest challenges in artificial intelligence.

DeepSeek’s breakthrough and ability to develop powerful AI models came amid the US ban on the export of advanced semiconductors to China, which will raise another question for Washington: Will it race, compete and innovate to win over DeepSeek through the market, or will it resort to imposing more restrictions on Beijing under the administration of US President Donald Trump, who is thirsty for trade wars, according to the slogan “Make America Great Again”?