Nvidia Shares: Game Over for Wall Street's 'Most Valuable Stock'? China’s DeepSeek Sparks Concerns

Nvidia Shares: Wall Street's beloved stock is witnessing a major crash as the entry of China's low-cost AI startup, DeepSeek, weighed heavily on investor sentiment. Just last year, GPUs, large language models (LLM) and all the jargons present in the tech space had convinced investors and digital enthusiasts that AI is an expensive game.

However, the low-cost startup, DeepSeek, recently received the 'most downloaded app' tag on the App Store, surpassing Open AI's ChatGPT. For a young company that was founded just 2 years back and was able to launch its open-source model for the world, the victory seems quite evident.

The 'low-cost' factor has hit Nvidia's share price the hardest. Earlier this week, the GPU maker’s shares dropped more than 16% on Nasdaq, with its market cap plunging by over $600 billion.

Plus, Nvidia is not alone in bearing the brunt of DeepSeek's entry. Shares of major tech giants plunged sharply after the young startup became the most downloaded app on Apple phones.

The tech-heavy index, Nasdaq plummeted by over 3%. During the same time, the New York Stock Exchange's FANG+ index (group of most valued tech companies in the US) also declined by more than 500 points or nearly 4%. This fall comes at a time when the US market was attracting heightened investor attention, largely owing to Trump's re-entry in the White House and his pro-corporate policy stance.

Stargate losing its shine?

Just last week, Trump announced the launch of Stargate Project to boost the western nation's AI infrastructure and create new job opportunities. The plan includes investing $500 billion over the next four years, with $100 billion set to be deployed immediately.

"The initial equity funders in Stargate are SoftBank, OpenAI, Oracle, and MGX. SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility. Masayoshi Son will be the chairman," Open AI said in a blogpost.

"Arm, Microsoft, NVIDIA, Oracle and OpenAI are the key initial technology partners. The buildout is currently underway, starting in Texas," the post further added. However, just after the announcement, Elon Musk stated that the project was fake.

The entry of China’s DeepSeek has sent major shockwaves across the US's tech sphere, especially given its lower cost, which is likely to weigh heavily on investor sentiment moving ahead.