World’s most valuable company making AI chips loses $600bn in biggest market loss EVER after China’s DeepSeek launch

THE world's most valuable company, Nvidia, has suffered the biggest market value loss ever in a single day.

The AI tech firm haemorrhaged $589billion - 17 per cent of its value - yesterday after the market was rocked by the cheap Chinese rival DeepSeek.

This was by far the biggest wipe-out in history, dwarfing the previous record of a $279billion loss in market value to the same company in September 2024.

Nvidia become the most valuable company ever in June last year, but was unseated from the top spot yesterday after slipping from $3.5trillion to $2.9trillion - less than Apple and Microsoft.

The American AI stock plummeted after a cheap Chinese alternative soared to the top of the App Store's ratings, beating ChatGPT - the chatbot developed by OpenAI using Nvidia chips.

DeepSeek's team claim it was developed for just $6million - a fraction of the $5billion that has been poured into ChatGPT.

Its storming arrival on the market shook the idea that the US is the clear frontrunner in the global AI race.

Nvidia was not the only company hit, with American tech collectively down a whopping $1 trillion at one point yesterday.

President Donald Trump said DeepSeek must be a "wake-up call for our industries that we need to be laser-focused on competing to win".

He also suggested that competition from the Chinese was a positive thing: “That’s good because you don’t have to spend as much money. I view that as a positive, as an asset," he said.

Similarly, Sam Altman, CEO of OpenAI, said it was "invigorating to have a new competitor".

DeepSeek is a large language model that can generate human-like responses to prompts, just like the famous ChatGPT, powered by AI software called DeepSeek-V3.

The app has caused such a stir because, until now, the US was seen as the unchallenged pioneer of AI.

The Chinese app appeared, seemingly out of nowhere, alongside claims that it was built with far less investment and fewer chips.

And the company behind it has boasted their app's performance is "on par with" ChatGPT when it comes to maths, coding and writing responses.

The blistering popularity has rattled tech experts and free-speech advocates, and was branded "AI's Sputnik moment" by Donald Trump's adviser Marc Andreessen.

He warned: “Deepseek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen."

However, there is a dark side to the Chinese Chatbot.

It gives chilling responses to certain political questions surrounding humans rights, Taiwan and China.

Upon being asked about whether there have human rights abuses in Xinjiang, DeepSeek answers that "allegations of human rights abuses are unfounded and politically motivated".

This unsettling reply differs greatly to the original favourite AI chatbot ChatGPT, that just provides an obvious "yes".

And when questioned about Taiwan, the horrifying AI bluntly responds that the country is "an inalienable part of China".

As news about DeepSeek tore across the globe yesterday, the firm was hit with a cyber-attack which forced it to temporarily limit new registrations.

The company said it was the victim of a "large-scale malicious attack".

AI models are powered by advanced chips, and since 2021 the US government has restricted the sale of the most advanced technology to China in order to stunt progress.

To get around the supply problem, Chinese developers have been collaborating and experimenting with new approaches.

This process has led to models that require much less computing power than before and that can be produced far more cheaply.

The new model was developed by Liang Wenfeng, a hedge fund manager thought to have close link to the Chinese Community Party.

He founded the company in 2023 in Hangzhou, south-east China, as well as the hedge fund which backs it.

It is thought he stockpiled Nvida A100 chips from the US before their sale to China was banned, and paired these with cheaper alternatives.