Tech billionaires lost almost $100bn in stock market selloff sparked by DeepSeek
Jan 28, 2025 - theguardian.com
DeepSeek's challenge to US AI dominance led to a significant market impact, wiping $600 billion off Nvidia's market value and causing a 3% drop in the Nasdaq index. This resulted in substantial financial losses for several tech billionaires, including Nvidia CEO Jensen Huang, whose net worth fell by $20.7 billion, and Oracle chair Larry Ellison, who lost $27.6 billion. The tech sector collectively saw $94 billion in wealth evaporate, with notable losses for figures like Dell CEO Michael Dell, Google cofounders Larry Page and Sergey Brin, and Tesla CEO Elon Musk. The selloff occurred ahead of key earnings reports from major tech companies, raising concerns about AI spending plans.
Despite the market reaction, some analysts believe the selloff was an overreaction, emphasizing that demand for top-tier AI hardware remains strong. Reports about DeepSeek's low-cost development of its R1 model were questioned, with suggestions that Chinese labs might possess more Nvidia chips than expected, potentially circumventing US export controls. Analysts like Gene Munster and Stacy Rasgon urged caution against doomsday scenarios, suggesting that the panic surrounding DeepSeek's impact on the AI market might be exaggerated.
Key takeaways:
DeepSeek's challenge to US AI dominance led to a significant market value drop for Nvidia, affecting the wealth of several tech billionaires.
Nvidia's CEO Jensen Huang experienced a $20.7bn loss, dropping his net worth to $103.7bn and his global wealth ranking from 10th to 17th.
Larry Ellison faced the largest individual loss of $27.6bn due to a 14% drop in Oracle's stock, moving him from third to fifth wealthiest.
Despite the selloff, some analysts believe the reaction was overblown and that demand for AI hardware will continue.
