{"id":225944,"date":"2025-01-28T08:32:41","date_gmt":"2025-01-28T08:32:41","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/01\/28\/worlds-richest-people-lose-108-billion-after-deepseek-selloff-the-times-of-india\/"},"modified":"2025-01-28T08:32:41","modified_gmt":"2025-01-28T08:32:41","slug":"worlds-richest-people-lose-108-billion-after-deepseek-selloff-the-times-of-india","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/01\/28\/worlds-richest-people-lose-108-billion-after-deepseek-selloff-the-times-of-india\/","title":{"rendered":"World\u2019s richest people lose $108 billion after DeepSeek selloff – The Times of India"},"content":{"rendered":"
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Billionaires whose fortunes are linked to artificial intelligence were the biggest losers: Huang saw his fortune fall $20.1 billion.<\/span><\/div>\n<\/section>\n<\/div><\/div>\n<\/div>\n

The world\u2019s 500 richest people, led by Nvidia Corp. co-founder Jensen Huang, lost a combined $108 billion on Monday as a tech-led selloff tied to Chinese AI developer DeepSeek sent major indices plunging.
Billionaires whose fortunes are linked to artificial intelligence were the biggest losers: Huang saw his fortune fall $20.1 billion, a 20% drop, while Oracle Corp. co-founder Larry Ellison\u2019s $22.6 billion loss was larger in absolute terms, but represented just 12% of his fortune, according to the Bloomberg Billionaires Index. Dell Inc.\u2019s Michael Dell lost $13 billion, and Binance Holdings Ltd. co-founder Changpeng \u201cCZ\u201d Zhao shaved $12.1 billion.
Tech-sector titans as a group saw $94 billion of wealth evaporate \u2014 roughly 85% of the Bloomberg index\u2019s total decline. The Nasdaq Composite Index fell 3.1%, and the S&P 500 dropped 1.5%.
Hangzhou-based DeepSeek has been developing AI models since 2023, but the company first came onto the radar of many Western investors this weekend as its free DeepSeek R1 chatbot app topped download charts worldwide. So many new users piled in that DeepSeek struggled to keep the app online, suffering outages and forcing it to restrict signups to users with Chinese phone numbers.
DeepSeek\u2019s dark-horse entry into the AI race, which it says cost just $5.6 million to develop, is a challenge to Silicon Valley\u2019s narrative that massive capital spending is essential to developing the strongest models. That delivered a serious blow to billionaires whose fortunes are tied to the Western AI supply chain that\u2019s been the equities market\u2019s biggest driver over the past two years.
Also Read | ‘Sputnik moment’: Chinese DeepSeek wipes off $1 trillion from US tech giants in a day<\/a><\/p>\n

Similar Playbook<\/h3>\n<\/p>\n

Soaring valuations for so-called AI hyperscalers \u2014 including Meta Platforms Inc., Alphabet Inc. and Microsoft Corp. \u2014 have generated billions in wealth for their owners since OpenAI unveiled ChatGPT in November 2022. These companies have for the most part operated on a similar playbook: Spend huge sums to develop and run AI systems by hoarding top-of-the-line semiconductors and the energy supplies needed to run them.
Meta Chief Executive Officer Mark Zuckerberg announced Friday that the company planned to spend $60 billion to $65 billion on projects related to AI this year, well above Wall Street estimates. Capital spending across all Big Tech firms is on pace to reach $200 billion in 2025, according to a Bloomberg Intelligence report.
Despite limited revenue to show for all their investment so far, markets have rewarded US tech stocks with record-high valuations, which have in turn generated historic wealth gains for their owners. Nvidia has stood out as the AI boom\u2019s biggest single winner so far, with Huang\u2019s net worth increasing almost eight-fold to $121 billion since the start of 2023 through Friday. Zuckerberg\u2019s fortune soared 385% to $229 billion over the same period and Amazon.com Inc.\u2019s Jeff Bezos gained 133% to $254 billion.
While Huang and Ellison suffered losses, other major tech billionaires\u2019 fortunes escaped unscathed. Zuckerberg\u2019s net worth ended the day up, gaining $4.3 billion as Meta rebounded from an early-session decline. Bezos\u2019 wealth climbed by about $632 million.<\/p>\n

Capital Spending<\/h3>\n<\/p>\n

The fact that DeepSeek was able to develop a free model that potentially rivals or beats competitors including ChatGPT and Anthropic\u2019s Claude at a fraction of the development cost led investors to question the logic behind Silicon Valley\u2019s dependence on capital spending.
A key reason why DeepSeek didn\u2019t rely on big investment and top-of-the-line chips to develop its model is that Chinese firms have had limited access to the powerful GPUs, or graphics processing units, most Western companies rely on ever since the US government instituted strict export controls on the most advanced chips.
In an interview with CNBC last week, Alexandr Wang, CEO of training data provider Scale AI, said that despite the export controls, DeepSeek and other Chinese developers likely have more GPUs than Silicon Valley is aware of.
\u201cThe Chinese labs have more H100s than people think,\u201d Wang said, referring to Nvidia\u2019s top-of-the-line AI chip. \u201cMy understanding is that DeepSeek has about 50,000 H100s, which they can\u2019t talk about, obviously, because it\u2019s against the export controls that the US has in place.\u201d<\/div>\n