Investors tremble over Chinese AI Nvidia with record loss in value after shock over cheap AI from China +++ Stock market quake destroys 1 trillion dollars

Excitement on stock markets worldwide: a Chinese start-up is putting pressure on the shares of US tech companies with a free AI. There could be a crash.

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10.46 pm

Nvidia with record value loss after shock about AI from China

The shock over allegedly drastically cheaper AI from China has caused the chip company Nvidia to suffer a record loss in value on the stock market. The stock market value fell by around 600 billion dollars on Monday after the shares closed trading down by around 17 percent.

Nvidia was still worth 2.9 trillion dollars, but lost the title of the most valuable US company to Apple.

In recent months, the boom in artificial intelligence (AI) had driven Nvidia's share price ever higher. The company's chip systems play a key role in the training of AI models in particular, but also in their operation. To date, this has required huge amounts of computer power - and investors assumed that further expansion would bring Nvidia even more business.

However, the Chinese start-up DeepSeek recently claimed to have trained its AI model with much less computing power and costs. The claim alone triggered concerns on the stock market that expectations for future growth at Nvidia are too high.

20:18

Nvidia posts record loss

It's a historic crash: the shares of chip manufacturer Nvidia plummeted by 18 percent today (as of 8 p.m.) - a record loss in market value. At the opening of trading on Wall Street, the chip manufacturer had already lost 13 percent and thus 465 billion US dollars. The free fall of the Nvidia share also dragged the Nasdaq 100 down with it: the New York tech index recorded a drop of 3.36 percent (as of 8 p.m.).

Investors fear that demand for high-end chips for the further development of AI technology will not be as strong as forecast. The background to this is the development of the R1 AI model. The application from the Chinese company DeepSeek requires less computing power, but delivers results that are just as good as those of its US competitors, such as ChatGPT.

Meanwhile, the AI turbulence was hardly noticeable on the Swiss stock exchange. The SMI closed the trading day up 1.05 percent.

5.34 pm

Stock market quake costs US stock market up to 1 trillion dollars

The stock market shock caused by the Chinese AI company DeepSeek has cost the US stock markets up to 1 trillion US dollars, as Axel Rudolph, senior technical analyst at the online trading platform IG, has calculated according to the Guardian. Chip manufacturer Nvidia alone, one of the biggest losers of the day with a price drop of 15.5 percent (as of 5.30 p.m.), lost more than 465 billion US dollars in stock market value.

By comparison, the development of the AI cost DeepSeek less than six million US dollars.

4.30 p.m.

Growing popularity causes failures at DeepSeek

While the Chinese start-up DeepSeek sent the prices of US tech stocks plummeting on the stock markets, the company itself had to contend with outages on its website. According to news agency Reuters, the reason for this is the rapidly growing demand for its own AI assistant, which is currently one of the most popular apps worldwide.

According to its status page, the company has since resolved problems with its programming interface and the inability of users to log in to the website. Monday's outages were the company's longest in around 90 days and coincide with its soaring popularity.

3:35 p.m.

Tech shares plummet

As expected, the share prices of high-paying tech companies fall significantly. Chip manufacturer Nvidia loses 11.5 percent in the first few minutes after the start of trading, while US tech company Broadcom falls by over 11.3 percent. Microsoft (-3.7 percent) and the software company Palantir (-6 percent) also fell significantly. The tech index Nasdaq loses 3.5 percent, the S&P 500 drops more than 2 percent.

3.30 p.m.

Trading begins

Trading has now opened on Wall Street. Investors are expecting some significant price losses.

3.25 pm

Stocks significantly lower in pre-market trading

DeepSeek triggers panic on the US stock markets: The share prices of highly valued companies such as Nvidia and Alphabet fall, in some cases significantly, in pre-market trading. Futures on the Nasdaq 100 technology index fell by four percent. Shares in Nvidia were down by more than 5 percent on the alternative trading system Blue Ocean

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The reason for this is the AI model of the company DeepSeek. The Hong Kong-based company released the R1 chatbot last week. The open source model is currently topping the download charts in many app stores.

Chinese AI is available free of charge

What makes the tech giants sweat: R1 is free. The chatbot shows that China's AI technology is by no means years behind that of the US. US President Donald Trump claimed this just last week and announced a gigantic 500 billion dollar program to further expand the AI infrastructure.

The fact that China is unable to access the latest chips due to trade restrictions is apparently not an obstacle either. "DeepSeek" uses an open source model that requires less computing power. Despite slight disadvantages in terms of speed, the Chinese AI is said to achieve better results in certain areas, such as mathematics and physics, than its US counterparts.

Investors fear tech crash on the stock market

There are slight signs of panic on Wall Street in pre-market trading. Nvidia shares, for example, have fallen by 10 percent, reports the news agency Reuters. There is apparently great concern about a crash in tech stocks. Stock market values plummeted worldwide. Technology stocks were also under pressure on the Swiss stock exchange until midday

The fear of a downturn in the tech sector is not unjustified, say analysts. The dominance of major US players in the field of artificial intelligence does not appear to be as unrestricted as repeatedly claimed. The share prices of many companies are therefore overvalued.