AI Startup DeepSeek Sends Nvidia Stock Plummeting—Is This the End of Chip Dominance?

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On a Monday that felt like a slap in the face from a wayward fish, Wall Street awoke to the news that a Chinese open-source AI startup, DeepSeek, had thrown a wrench into the gears of the chip industry. It was as if the Internet had decided it no longer needed the fancy, shiny chips that had once been the toast of the town. Who needs faster chips when you can have a free app that does the same thing? 🤷‍♂️

The morning began with a bang, but not the kind that brings joy. Nvidia, the hotshot chipmaker from Santa Clara, took a nosedive that would make a skydiver envious. In mere moments, the stock plummeted from a respectable $142 to a pitiful $124. It was a free fall that would make even the most seasoned investor clutch their pearls. 💔

Nvidia Stock, Other Semiconductors Crash

As the day wore on, Nvidia’s stock continued its downward spiral, finally finding a semblance of support around $118. Meanwhile, Taiwan Semiconductor decided to join the party, dropping 14%, while Broadcom, that San Jose semiconductor company, took a 17% dive. It was a veritable carnival of chaos in the semiconductor world. 🎢

But what, you may ask, was the cause of this pandemonium? Well, it turns out that DeepSeek, a project reminiscent of California’s OpenAI, had hit a milestone that sent shockwaves through the market. Its app downloads had overtaken ChatGPT on the Apple app store, and suddenly, the world was abuzz with the idea that maybe, just maybe, we didn’t need those expensive chips after all.

DeepSeek, with its open-source model, claimed it could deliver the same services as ChatGPT but at a fraction of the cost. It was like finding out that the fancy restaurant down the street served the same meal as your mom’s kitchen—only hers was free and came with a side of nostalgia. 🍽️

Chinese AI Startup DeepSeek Makes Big Splash

Brian Jacobsen, the chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, weighed in on the madness. “If DeepSeek is the proverbial ‘better mousetrap,’ it could disrupt the entire AI narrative that has driven the markets for the last two years,” he mused, probably while sipping a cup of coffee that cost more than a small car.

“It could mean less demand for chips, less need for a massive build-out of power production to fuel the models, and less need for large-scale data centers,” he added, as if he were reading from a script written by a doomsday prophet. “However, it could also mean that AI becomes more accessible and help kickstart the development of a wide array of useful applications.”

Once upon a time, Nvidia had surpassed Microsoft to become the world’s biggest company by market cap, but on this fateful Monday, it seemed like the mighty had fallen, and the chips were down. 🍟

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2025-01-28 09:36