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

Nvidia shares plunged 17% on Monday, resulting in a market cap loss of close to $600 billion, the biggest drop ever for a U.S. company.

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.

With Monday’s losses, Apple has retaken the title of world’s most valuable company and Nvidia’s value sank to around $2.8 trillion.

Selling in Nvidia was like a whirlwind, pushing the stock to lose up to $600 billion market. The reason for the frenzy was one Chinese app called DeepSeek!

The emergence of China-based AI app DeepSeek sent shares plummeting on Monday for many U.S. tech giants, including chipmaker Nvidia and AI-backer Microsoft.

The emergence of DeepSeek's free assistant has placed big doubts over the US market's AI-driven rally of the past two years.

The S&P 500 fell 1.9 per cent. The Nasdaq 100 sank 3.2 per cent. The Dow Jones Industrial Average lost 0.2 per cent. A gauge of the “ Magnificent Seven” megacaps slid 2.9 per cent. The Russell 2000 slipped 0.8 per cent. Wall Street’s “fear gauge” — the VIX — soared the most since mid-December to almost 20.

The AMD unified shader architecture that debuted in the Xbox 360 ushered in a new era for the graphics processing unit (GPU).

Shares of the chipmaker, one of the primary beneficiaries of the artificial intelligence boom in tech stocks, plummeted as much as 18%. That pushed Nvidia's market value below $3 trillion. Still, shares of the firm are up more than 480% over the last two years.

David Shaw's D.E. Shaw bought 5.9 million shares of Nvidia, increasing its position by 53%. Nvidia is now the largest holding. Meanwhile, D.E. Shaw sold 8.7 million shares of Palantir, reducing its stake by 45%.