"NVIDIA Plunges 12% as DeepSeek's AI Rival Emerges"

The U.S. stock market opened lower on Tuesday, with the three major indexes, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, all posting significant declines. The sell-off was led by a 12% drop in NVIDIA Corporation (NVDA) shares, which weighed heavily on the tech-heavy Nasdaq Composite.

NVIDIA's stock price fell after reports emerged that Chinese AI startup DeepSeek had released a large language model (LLM) that performs on par with OpenAI and other AI systems, despite U.S. restrictions on chip imports. The company also revealed another LLM trained at a fraction of the cost of other AI systems, positioning itself as a top competitor to OpenAI and NVIDIA.

The news sent shockwaves through the U.S. stock market, with Nasdaq contracts and Japanese chipmaker stocks experiencing massive selling. The NASDAQ composite index was down by 99.38%, Dow Jones global went down by 140.82%, and S&P 500 fell by 17.47%. Meanwhile, Chinese tech shares surged to historical levels as market investors turned to DeepSeek after its rapid rise.

The sell-off in U.S. tech stocks resulted in a market loss of over $1 trillion, disrupting the AI sector and raising concerns about the continued dominance of U.S. AI companies. Investors panicked, leading to a market sell-off.

NVIDIA's stock decline also affected AI-themed cryptocurrencies, with all AI coins experiencing one of the largest dips of 2025. Coins such as Render (RNDR), Injective (INJ), Artificial Superintelligence Alliance (FET), Filecoin (FIL), Near Protocol (NEAR), and Internet Computer (ICP) all saw significant drops.

The crash in AI coins is not an isolated case, as the crash in the U.S. stock market has affected the whole crypto market. Major cryptocurrencies such as Bitcoin (BTC) dipped to a low of $98k. The dip in AI coins once again highlights the close correlation between cryptocurrency and traditional finance.