Tech selloff wipes $108 billion from world’s richest as DeepSeek AI shakes market confidence

The world’s 500 richest individuals, led by Nvidia Corp. co-founder Jensen Huang, saw their collective wealth plummet by a staggering $108 billion on January 27. 

The massive selloff, triggered by a surprise surge from Chinese AI startup DeepSeek, sent major stock indices into a sharp decline, Caliber.Az reports via Bloomberg.

Billionaires with significant stakes in artificial intelligence were hit the hardest. Jensen Huang’s net worth fell by $20.1 billion, marking a 20% drop, while Oracle co-founder Larry Ellison suffered a $22.6 billion loss, which, though larger in absolute terms, represented just 12% of his fortune, according to the Bloomberg Billionaires Index. Other notable losses included $13 billion for Dell Inc.’s Michael Dell and $12.1 billion for Binance Holdings Ltd. co-founder Changpeng Zhao.

Tech-sector moguls collectively lost $94 billion, accounting for roughly 85% of the total decline in the Bloomberg index. The Nasdaq Composite Index dropped by 3.1%, while the S&P 500 fell by 1.5%, reflecting the broader market's response.

At the centre of the storm is Hangzhou-based DeepSeek, which has been developing AI models since 2023. However, the company gained widespread attention only this past weekend when its free DeepSeek R1 chatbot app surged to the top of global download charts. The app’s popularity overwhelmed DeepSeek’s infrastructure, resulting in outages and forcing the company to restrict signups to users with Chinese phone numbers.

DeepSeek’s rapid rise has caught the attention of Western investors, especially due to its claimed development costs of just $5.6 million. This challenges the Silicon Valley narrative that massive capital investments are necessary to create cutting-edge AI models. The rise of DeepSeek has rattled the billionaires who have been fueling the growth of the AI sector, leaving them with a significant financial blow as their fortunes are closely tied to Western AI companies.

By Khagan Isayev