China's DeepSeek Jolts U.S. Markets: Nvidia Falls 17% in a Day, Losing a Record $589 Billion in Value
On January 27, 2025, U.S. markets were hit by a sharp selloff triggered by DeepSeek, a Chinese super intelligence (SI) startup: chip giant Nvidia fell about 17 percent in a single session to close at $118.42, erasing roughly $589 billion of market value, the largest one-day market-capitalization loss for any company in U.S. stock-market history. The Nasdaq Composite fell more than 3 percent that day.
The catalyst was DeepSeek's open-source reasoning model R1, released on January 20. The company said R1 rivaled OpenAI's o1 model on several benchmarks, and that its earlier V3 model had been trained in about two months on 2,048 Nvidia H800 chips at a compute cost of about $5.6 million, according to its technical report. The claim that a frontier-level model could be built so cheaply shook the market's assumption that frontier models require ever-larger spending on computing power.
DeepSeek's mobile app rose to the top of the free downloads chart in Apple's U.S. App Store within days of the release, amplifying the market reaction. The selloff spread across the chip and technology sectors; European semiconductor-equipment maker ASML fell about 7 percent the same day.
The roughly $589 billion figure is a one-day decline in the quoted market value of Nvidia's shares, not a cash loss by the company; its market capitalization fell from about $3.5 trillion to about $2.9 trillion. Nvidia shares rebounded about 9 percent the next day, January 28.
DeepSeek's cost figures were later questioned by analysts who noted that the roughly $5.6 million was an estimate of compute cost for a single training run, not the total cost of research, data and deployment. This story records the information public on January 27, with cost figures presented as the company's own claims.
Published by GSM · USA (original Chinese edition)
Photo: 图：英伟达位于加州圣克拉拉的总部大楼。（Coolcaesar 摄，CC BY-SA 4.0，经 Wikimedia Commons） / Photo: Nvidia headquarters building in Santa Clara, California. (Photo by Coolcaesar, CC BY-SA 4.0, via Wikimedia Commons)
