Why did DeepSeek’s launch cause a drop in NVIDIA’s stock?

DeepSeek’s launch of its R1 AI model disrupted the market by showcasing its competitive performance despite using older hardware and a much smaller budget compared to leading AI models like OpenAI’s ChatGPT. This raised questions about whether DeepSeek had access to proprietary data from OpenAI and its competitors, which could have been used to build its model. The suspicion of data misuse led to significant concerns about intellectual property violations and potential security breaches within the AI industry. As a result, the stock market reacted negatively, with NVIDIA, a key player in the AI infrastructure market, seeing a massive drop in its market value by nearly $600 billion within a day. This downturn reflected investor fears about the consequences of DeepSeek's success and its potential impact on companies like NVIDIA that had heavily invested in AI technologies. For more details, visit http://scvgosir.blogspot.com/2025/01/microsoft-investigates-deepseeks.html

Microsoft Investigates DeepSeek’s Unauthorized Use of OpenAI Data