Nvidia Corp shed almost US$600 billion in value on Monday to suffer the largest rout in stock market history.
Shares slumped 16.9%, equating to US$589 billion, as China's DeepSeek sparked a global tech sell-off with its cheaper and less data-hungry artificial intelligence.
Some US$1 trillion had been wiped off European and US artificial intelligence-focused firms’ market capitalisations early on in the day as a result, as jitters arose over the relevance of so-far dominant players.
Nvidia's decline meant Apple Inc retook the spot as the world’s largest company by market cap, while Microsoft Corp crept up to second place.
Microsoft itself faced a beating though, dropping 2.1%, as a string of peers came under pressure, including Tesla Inc, which fell by 2.3%.
Micron Technology Inc, ASML Holding NV, Advanced Micro Devices Inc, Dell Technologies Inc and Super Micro Computer Inc faced steeper declines in the meantime.
DeepSeek last week unveiled an artificial intelligence bot said to be far cheaper and efficient than existing models, rasing questions over high development costs at rivals.
DeepSeek’s open-source model was said to have been trained for roughly US$6 million, which, though disputed, would compare to billions spent by rivals
“It's potentially a major challenge to the incumbents, and questions are being raised about the billions of dollars they've pumped into developing their own AI models,” ING Economics analysts noted.
“The breakthrough could be that DeepSeek can achieve a state-of-the-art model without state-of-the-art equipment. The current notion is that for larger models, one needs more computing power - if you want more context, you need more calculations.”