Tech Titans Suffer $108 Billion Hit amid Chinese AI Surge
TEHRAN (Tasnim) – The fortunes of the world’s wealthiest took a sharp hit on Monday, with $108 billion wiped out in a tech-driven sell-off spurred by DeepSeek, a Chinese AI app that overtook ChatGPT as the most popular AI tool.
Global tech stocks plummeted on Monday after the meteoric rise of DeepSeek, a Chinese AI app that surpassed OpenAI’s ChatGPT as the most popular program on the Apple App Store over the weekend. The market response wiped out billions in wealth from top tech billionaires, including Nvidia’s Jensen Huang and Oracle’s Larry Ellison, according to Bloomberg.
DeepSeek’s launch highlighted cost-efficiency and innovation, boasting the development of its latest AI model for under $6 million, far below the billions spent by American counterparts. This claim fueled concerns over US tech leadership in artificial intelligence, sending ripples across global financial markets.
The NASDAQ Composite Index plunged 3.1%, while the S&P 500 dropped by 1.5%. Nvidia, which has been at the forefront of AI hype, saw its stock fall by 17%, erasing $600 billion in market value. The losses stripped Huang of $20.1 billion, a 20% hit to his net worth.
Oracle's shares dipped 14%, reducing Ellison’s fortune by $22.6 billion or 12%. Michael Dell and Binance's Changpeng Zhao also faced substantial losses of $13 billion and $12.1 billion, respectively.
Conversely, some industry leaders saw gains. Meta’s Mark Zuckerberg added $4.3 billion to his wealth, and Amazon’s Jeff Bezos gained $600 million.
DeepSeek's AI achievement raised questions about the financial dominance required for AI development. Analysts noted that US export restrictions limited Chinese firms’ access to advanced chips, forcing cost-effective solutions. DeepSeek used Nvidia’s export-compliant H800 chips for its model, underscoring the potential for innovation on smaller budgets.
Commenting on the development, former US President Donald Trump emphasized the need for American tech companies to adapt. "The release of DeepSeek AI from a Chinese company should be a wake-up call," Trump told reporters. "Instead of spending billions, you’ll spend less and hopefully achieve the same results."
Market shock extended globally, with European firms like ASML and ASM International seeing sharp declines. In Asia, Japan’s Advantest and Tokyo Electron suffered broad losses.
Despite DeepSeek's rapid success, industry experts remain skeptical of its reported development costs. Analysts from Bernstein doubted the $6 million figure, citing possible omissions in prior research and developmental expenses. They cautioned against overreacting to fears of a “death-knell” for US AI dominance, affirming the importance of advanced GPUs in maintaining competitive edges.
DeepSeek’s breakthrough, coupled with the announcement of the $500 billion Stargate AI project, is likely to accelerate competition in the global AI market. However, questions linger over whether the US can maintain its technological edge in a field increasingly characterized by cost-efficient innovation.
