Largest Single-Day Loss in Stock Market History

Red graph with downward arrow showing decline.

(StraightShooterNews.com) – Marking the largest single-day loss in stock market history, Chinese AI startup DeepSeek has sent shockwaves through the American tech industry, causing Nvidia’s stock to plummet and wiping out $560 billion in market value.

This unexpected turn of events has raised serious concerns about the effectiveness of U.S. export bans and the true cost of AI development, leaving investors wondering if China has outmaneuvered America in the high-stakes race for AI dominance.

The sudden 18% drop in Nvidia’s stock price on Monday sent ripples through the entire tech sector, with the S&P 500 falling 1.5% and the Nasdaq composite tumbling 3.1%.

This market upheaval was triggered by DeepSeek’s announcement of a new AI model that reportedly cost just $5.6 million to train, a fraction of the $100 million price tag for OpenAI’s GPT-4.

The stark contrast in development costs has raised alarm bells about the future of American AI dominance.

If Chinese companies can produce comparable AI models at a fraction of the cost, it could severely undermine the competitive edge of U.S. tech giants and their massive investments in AI infrastructure.

Adding fuel to the fire, venture capitalist Marc Andreessen praised DeepSeek’s AI model as “one of the most amazing and impressive breakthroughs I’ve ever seen.”

This endorsement from a prominent figure in Silicon Valley has only intensified concerns about China’s rapidly advancing AI capabilities.

The implications of DeepSeek’s breakthrough extend far beyond just Nvidia. Other chip manufacturers like Broadcom, Micron, and Advanced Micro Devices also saw their stock prices decline.

However, some analysts caution against overreacting to the news. Stacy Rasgon questioned the reported $5.6 million training cost, noting that it likely excludes other significant research and development expenses.

Nvidia itself downplayed the impact of DeepSeek’s model, calling it an “excellent AI advancement” but not a game-changer.

Despite these reassurances, the market’s reaction highlights the growing anxiety about China’s ability to circumvent U.S. export restrictions and foster innovation under challenging conditions.

This development raises serious questions about the effectiveness of current U.S. policies aimed at maintaining technological superiority.

In response to these challenges, the U.S. is ramping up its investment in AI infrastructure.

The Stargate AI project, announced by President Trump, plans to inject $100 billion immediately and $400 billion over four years into American AI development.

This massive investment, backed by industry giants like SoftBank, Oracle, and OpenAI, demonstrates America’s commitment to maintaining its technological edge.

As the dust settles from this market upheaval, the AI race between the U.S. and China is far from over.

While DeepSeek’s breakthrough has caused temporary panic, it also serves as a wake-up call for American tech companies and policymakers.

The challenge now is to leverage resources, innovation, and determination to ensure that America remains at the forefront of AI development, safeguarding economic interests and national security in an increasingly competitive global landscape.

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