Nvidia (NVDA) Stock Price Dips 12% As DeepSeek Challenges US’s Tech Dominance

Nvidia (NVDA) Stock price has caught the eyes of investors, with around 12% dip today in the pre-market trading session. Notably, the slump comes amid a broader tech market rout, with most of the AI stocks trading in the red. This massive selling pressure in the broader technology market comes amid China’s AI startup DeekSeek raised questions over the US’s dominance in the tech segment.

Why Is Nvidia (NVDA) Stock Price Slipping Today?

Nvidia’s dramatic dip reflects growing uncertainty in the US tech sector. Chinese AI startup DeepSeek unveiled a new model that rivals offerings from US tech leaders like OpenAI and Meta. The model, developed at a fraction of the cost, has taken the industry by storm, raising questions about the sustainability of US dominance in the tech sector.

Meanwhile, DeepSeek’s latest model, DeepSeek-V3, reportedly outperformed OpenAI’s latest version in third-party tests. A flurry of recent reports highlighted its soaring popularity, with the app ranking at the top of Apple’s App Store. This low-cost breakthrough is pressuring AI chipmakers, including Nvidia, whose stock dropped nearly 12% in the pre-market session.

Global Tech Market Faces Massive Selloff

Nvidia stock isn’t the only tech player facing turbulence. Chip giants ASML and AMD also recorded steep losses, with shares tumbling by 4-10%.

Notably, all these companies have benefited from the AI boom but now face increased skepticism due to cost-efficient competition. Also, other tech and crypto stocks have witnessed a sharp decline today.

Meanwhile, DeepSeek’s emergence highlights the growing importance of affordability in AI innovation. Its $5.6 million development cost is significantly lower than the budgets of US tech giants. Analysts predict this shift may lead to increased pressure on traditional AI chipmakers to lower costs or innovate further, further impacting the Nvidia stock price ahead.

In addition, these advancements have also cast doubt on major US AI initiatives, such as Donald Trump’s Stargate AI project. The project, involving Oracle, OpenAI, and others, plans a $500 billion investment in American AI infrastructure. Critics argue that the emergence of affordable alternatives like DeepSeek could diminish the project’s relevance.

NVDA Stock Price Slips 12% Raising Market Concerns

Nvidia (NVDA) stock price was down 11.81% and exchanged hands at $125.84 in the pre-market trading session on Monday. If this decline continues, it could potentially erase around $400 billion from Nvidia’s market cap, which currently stands at $3.09 trillion. Notably, the stock closed at $142.62 in the previous session.

Meanwhile, this massive slump in NVDA stock has also impacted the crypto market, especially triggering a AI coins crash today. Besides, this crash also reflects the ever-evolving dynamics in the technology sector. As low-cost models disrupt the market, Nvidia may have to evolve its business mode or adjust its pricing strategies.

The leading financial newsletter The Kobeissi Letter highlighted the recent slump, saying “DeepSeek is CRUSHING US Stocks.” The report noted that Nasdaq 100 Futures lost 1,000 points, its largest loss since September 2022. Simultaneously, Nvidia’s $400 billion market cap decline, if happens, will mark it as the “biggest 1-day loss in a stock in HISTORY.”