DeepSeek announced a new AI model that rivals OpenAI's ChatGPT and Meta's Llama 3.1, using less advanced chips from Nvidia, raising concerns about Nvidia's premium offerings. This announcement contributed to the tech-heavy Nasdaq dropping over 600 points, with other major indices like the Dow Jones and S&P 500 also experiencing declines. Despite the market reaction, analysts at Wedbush believe that DeepSeek's threat is not yet a major concern, as U.S. companies continue to lead in AI development, particularly in the pursuit of artificial general intelligence (AGI).
Key takeaways:
- Nvidia CEO Jensen Huang's net worth dropped by $18 billion as Nvidia's stock fell significantly.
- Nvidia's market capitalization decreased by over $465 billion, making it the third-most valuable company after Apple and Microsoft.
- The sell-off in global technology stocks was triggered by concerns over competition from Chinese AI startup DeepSeek.
- Despite the perceived threat from DeepSeek, analysts believe U.S. companies still lead in AI development towards artificial general intelligence.