Chinese AI Breakthrough Sparks Historic Nvidia Selloff, While Apple Defies Market Trend

A seismic shift hit U.S. technology stocks as Chinese artificial intelligence startup DeepSeek unveiled its groundbreaking R-1 model, triggering one of the most significant single-day losses in market history. However, not all tech giants felt the tremors equally, with Apple leading a small group of resilient performers.

Market Impact

The release of DeepSeek's R-1 model sent shockwaves through Wall Street, particularly affecting companies deeply invested in AI infrastructure. Nvidia bore the brunt of the impact, suffering an unprecedented $600 billion single-day market value loss – the largest in U.S. stock market history – as its shares plunged nearly 17%.

While most tech giants struggled, three members of the "Magnificent Seven" managed to buck the trend:

• Apple (AAPL) emerged as the standout performer, gaining 3.18%
• Meta Platforms (META) advanced 1.91%
• Amazon (AMZN) edged up 0.24%

Other major tech players faced significant pressure:

• Alphabet (GOOG) declined 4%
• Microsoft (MSFT) fell 2.14%
• Tesla (TSLA) dropped 2.32%

The DeepSeek Factor

The market turbulence stems from DeepSeek's claim of achieving ChatGPT-level performance at a fraction of the cost. The startup reported developing its R-1 model with just $6 million in funding – a figure that stands in stark contrast to President Trump's recently announced $500 billion AI infrastructure investment plan.

The achievement was significant enough for Marc Andreessen, co-founder of Andreessen Horowitz, to label it "AI's Sputnik moment," drawing parallels to the Soviet Union's historic space achievement that catalyzed the space race.

Broader Market Impact

The ripple effects extended beyond traditional tech stocks:

• Bitcoin (BTC) initially dropped to $98,930 before recovering to $101,500
• The broader cryptocurrency market experienced a 2% decline

Industry Response

The AI community's reaction has been mixed:

• Some industry experts, including Investing.com analyst Jesse Cohen, express skepticism about DeepSeek's reported development costs
• Others praise the company's commitment to open-source development
• Early adopters like Venice AI have already integrated DeepSeek's model

Current Status

DeepSeek, founded by Liang Wenfeng in Hangzhou in May 2023, has temporarily restricted new registrations, citing malicious attacks on its platform. This development adds another layer of complexity to an already significant market event.

The market's reaction to DeepSeek's innovation highlights the increasing competition in global AI development and its potential to reshape the technology investment landscape.