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US tech groups closely tied to the artificial intelligence boom have lost more than $1tn in market value since last Friday, with Wall Street on course for its worst week since President Donald Trump’s “liberation day” tariffs in April.
The market value of eight of the most valuable AI-related stocks — including Nvidia, Meta, Palantir and Oracle — has fallen by $1.03tn since the end of last week.
Trading on Friday morning deepened tech investors’ losses for the week, with Nvidia falling 2.7 per cent in early trading. Microsoft, Amazon, Alphabet and Broadcom also lost ground.
The declines have left the tech-heavy Nasdaq Composite on course for a weekly loss of 3.9 per cent, its worst five-day run since the index fell 10 per cent after Trump launched his trade war with a blitz of tariff announcements in April.
Nvidia, the world’s most valuable company, has fallen the most in dollar terms over the week. Its market capitalisation loss is nearly $500bn, little more than a week since it became the first company ever to hit a $5tn valuation.
Chief executive Jensen Huang told the Financial Times this week that he expected China was ultimately “going to win the AI race” against the US.
He subsequently tried to row back on the comments, saying that China was “nanoseconds behind America in AI”. The remarks came as the Silicon Valley chipmaker’s hopes were waning that the US government would allow it to sell a version of its latest Blackwell AI processor to Chinese customers.
Chinese competitors are already narrowing the technical lead held by OpenAI, Microsoft, Google, Meta and Anthropic, which are all making huge investments in AI infrastructure, much of it based on Nvidia’s chips.
This week’s debut of Beijing-based Moonshot AI’s new Kimi K2 Thinking model was hailed as the latest breakthrough by Chinese developers, with reports suggesting it cost less than $5mn to train.
The release of DeepSeek’s low-cost R1 model sparked a Wall Street panic in January that wiped $589bn from Nvidia’s market value in a single day.
“Is this another DeepSeek moment?” Thomas Wolf, co-founder of AI developer platform Hugging Face, said in a social media post about Kimi.
Comments this week by OpenAI’s finance chief Sarah Friar that the $500bn AI start-up might look to the US government to provide a funding “backstop” also triggered speculation about its finances.
The company’s elaborate web of deals with chipmakers Nvidia, AMD and Broadcom, as well as cloud partnerships with Microsoft, Amazon and Google, mean that much of Big Tech’s expected growth in the coming years is now intertwined with OpenAI’s.
OpenAI’s chief executive Sam Altman sought to calm anxiety in a social media post on Thursday, saying: “We do not have or want government guarantees for OpenAI data centres.”
He predicted that OpenAI’s revenues would “grow to hundreds of billion[s] by 2030”, though that figure may fall below its AI infrastructure commitments, which he said totalled $1.4tn over the next eight years.