The world’s wealthiest individuals, led by Nvidia Corp.’s co-founder Jensen Huang, saw their fortunes take a staggering hit on Monday, losing a combined $108 billion.
The steep decline was fueled by a tech-driven market selloff triggered by the rise of Chinese artificial intelligence developer DeepSeek, which sent major U.S. indices tumbling.
Jensen Huang’s net worth plunged by $20.1 billion, a drop of nearly 20%. Oracle co-founder Larry Ellison experienced a $22.6 billion loss, representing 12% of his total wealth.
- Other significant losses included $13 billion for Dell Inc.’s Michael Dell and $12.1 billion for Binance Holdings’ Changpeng “CZ” Zhao.
- According to the Bloomberg Billionaires Index, tech-sector magnates collectively lost $94 billion, roughly 85% of the index’s total decline.
The Nasdaq Composite Index fell by 3.1%, while the S&P 500 dropped 1.5%, as investors reevaluated the trajectory of AI-focused companies in the wake of DeepSeek’s disruptive entry into the industry.
Some context
Headquartered in Hangzhou, China, DeepSeek has made waves with the recent launch of its DeepSeek R1 chatbot, an ultra-affordable AI model that quickly surged to the top of global app download charts over the weekend.
- The chatbot’s meteoric rise, developed on a modest $5.6 million budget, overwhelmed the company’s servers, prompting DeepSeek to limit new user registrations to those with Chinese phone numbers.
- DeepSeek’s streamlined and cost-efficient approach to AI development stands in stark contrast to the capital-intensive strategies dominating Silicon Valley.
- American tech giants like Meta, Alphabet, and Microsoft have invested billions in cutting-edge GPUs and energy-heavy infrastructure to power their AI ambitions, driving their valuations to unprecedented levels over the past two years.
In line with this trend, Meta CEO Mark Zuckerberg recently revealed plans to allocate $60 billion to $65 billion toward AI initiatives in 2025, far surpassing analysts’ forecasts. Collectively, major U.S. tech firms are expected to pour an estimated $200 billion into AI advancements this year, according to Bloomberg Intelligence.
What we know
- While Huang and Ellison saw significant losses, some tech billionaires emerged unscathed. Mark Zuckerberg’s fortune climbed by $4.3 billion as Meta rebounded from early-session declines, while Jeff Bezos gained $632 million in wealth by the end of the day.
- DeepSeek’s lean development strategy is shaking up the AI landscape, sparking comparisons to high-profile models like ChatGPT and Anthropic’s Claude. Its success raises questions about Silicon Valley’s dependence on expensive infrastructure and massive capital investment.
Chinese developers, constrained by U.S. export restrictions on advanced GPUs like Nvidia’s H100, have found alternative pathways to achieve competitive results. Alexandr Wang, CEO of Scale AI, speculated that DeepSeek and other Chinese labs may have quietly amassed tens of thousands of advanced GPUs despite the export controls.