In what marks the largest single-day drop in stock market history, Nvidia's valuation has been hit by China's answer to ChatGPT.

Then there is the hype question. Since Chat GPT set off the AI gold rush in late 2022, Nvidia has been the ultimate “picks and shovel” play. But like investment in the early days of the internet, the AI boom has so far been based more on the belief that it will change everything than hard evidence that it can generate returns.

Nvidia, led by boss Jensen Huang (pictured), lost almost $600bn in value, after China claimed its new Deepseek AI chatbot was far more efficient than rivals

Nvidia faces new threats as China's DeepSeek challenges AI chip dominance, shaking markets. Can Nvidia maintain its competitive edge?

US chipmaker Nvidia has suffered the largest stock market slump in history after the emergence of an advanced Chinese artificial intelligence (AI) model raised doubts about its technology.

Shares of chipmaker Nvidia plunged Monday, for its worst day since the global market sell-off in March 2020 triggered by the coronavirus pandemic.

It took less than two years for Nvidia to add more than $3 trillion in market value and become Wall Street's most-valuable publicly traded company. However, the arrival of DeepSeek reminds investors that next-big-thing technologies have an ominous early stage track record.

While investors fret about what the arrival of DeepSeek means for their all-in bet on American artificial intelligence dominance, they’re ignoring even bigger questions.

Both Meta and Microsoft committed to huge investments in artificial intelligence, despite new Chinese software outperforming American rivals at a lower cost.

Retail investors bought a net $562 million of Nvidia stock on Monday, the largest single-day inflow in at least 10 years, VandaTrack said.

Chinese AI startup DeepSeek has shaken up the tech industry with its new chatbot, Deepseek R1, which claims to match or outperform top AI models like ChatGPT at a fraction of the cost.