DeepSeek’s AI Emergence Triggers Record Nvidia Loss and Tech Selloff

The tech and energy sectors suffered large losses on Monday.

The shockwaves reverberated well beyond Nvidia, whose shares fell nearly 17%. Chipmaker Broadcom plunged 17.4%, and other prominent AI backers like Microsoft and Alphabet each posted significant losses. Meanwhile, power utilities—previously buoyed by hopes of a massive demand surge from data center expansion—also sold off in droves, with Vistra and Constellation Energy retreating steeply. The fear is that a more efficient AI model, usable on everyday devices rather than large-scale data centers, could diminish the capital-intensive push that has driven sector investment and stock valuations over the last two years.

In response to the tech rout, many investors flocked to safe-haven government bonds and more stable currencies, suggesting a growing unease with assets deemed vulnerable to abrupt technological disruption. While some market watchers view Monday’s selloff as an overreaction—particularly those who believe the industry will rely on supplying chips for data centers—others see DeepSeek’s free, open-source model as a potential game-changer. Executives across Silicon Valley have praised the new technology’s speed and cost-effectiveness, comparing its impact to historical “Sputnik moments” that spurred major industry shifts.

The sudden emergence of an AI heavy-hitter like DeepSeek is especially alarming given the Trump administration’s recent commitment to invest $500 billion in American data centers. In a field as dynamic as AI, attempts to restrict or stimulate development may yield unintended consequences—both for the tech giants caught off guard and for the global community grappling with the future of artificial intelligence.