The cryptocurrency world was rocked by the news of one of the largest heists in its history: hackers stole a staggering $1.5 billion from the popular exchange Bybit. This incident, reported by NBC News, is a stark reminder of the vulnerabilities that still plague the crypto industry, despite its rapid growth and technological advancements. Let’s dive into what happened, what it means for the crypto ecosystem, and how users and exchanges can better protect themselves in the future. What Happened? Bybit, a leading cryptocurrency exchange known for its derivatives trading platform, fell victim to a sophisticated cyberattack. Hackers exploited vulnerabilities in the exchange’s security infrastructure, making off with $1.5 billion in digital assets. While the exact method of the attack hasn’t been fully disclosed, such breaches often involve phishing, social engineering, or exploiting software flaws. This heist is particularly alarming due to the sheer scale of the theft. It not only ...
Nvidia stock shares plummeted on Monday, wiping out hundreds of billions in market value, as investors grappled with the emergence of a powerful and surprisingly affordable AI model from Chinese startup DeepSeek.
Global investors were worried that the emergence of the low-cost Chinese artificial intelligence model would threaten the dominance of AI leaders like Nvidia, evaporating $593 billion of the chipmaker's market value, a record one-day loss for any company on Wall Street.
Last week, Chinese startup DeepSeek launched a free AI assistant that it says uses less data at a fraction of the cost of incumbent services. By Monday, the assistant had overtaken US rival ChatGPT in downloads from Apple's app store.
This led the tech-heavy Nasdaq to fall 3.1% on Monday. Nvidia was the Nasdaq's biggest drag, with its shares tumbling just under 17% and marking a record one-day loss in market capitalization for a Wall Street stock, according to LSEG data. Nvidia's market-cap loss on Monday was more than double the previous one-day record, set by Nvidia last September.
The Nasdaq's next-biggest drag was chipmaker Broadcom Inc , which finished down 17.4%, followed by ChatGPT backer Microsoft, which fell 2.1% and then Google parent Alphabet, which ended down 4.2%.
The Philadelphia semiconductor index tumbled 9.2%, for its biggest percentage drop since March 2020 and its biggest decliner was Marvell Technology, which tumbled 19.1%.
US equity declines followed a selloff that started in Asia, with Japan's SoftBank Group finishing down 8.3%, and moved through Europe where ASML fell 7%.
Nvidia stock shares plummeted on Monday, wiping out hundreds of billions in market value, as investors grappled with the emergence of a powerful and surprisingly affordable AI model from Chinese startup DeepSeek.
Global investors were worried that the emergence of the low-cost Chinese artificial intelligence model would threaten the dominance of AI leaders like Nvidia, evaporating $593 billion of the chipmaker's market value, a record one-day loss for any company on Wall Street.
Last week, Chinese startup DeepSeek launched a free AI assistant that it says uses less data at a fraction of the cost of incumbent services. By Monday, the assistant had overtaken US rival ChatGPT in downloads from Apple's app store.
This led the tech-heavy Nasdaq to fall 3.1% on Monday. Nvidia was the Nasdaq's biggest drag, with its shares tumbling just under 17% and marking a record one-day loss in market capitalization for a Wall Street stock, according to LSEG data. Nvidia's market-cap loss on Monday was more than double the previous one-day record, set by Nvidia last September.
The Nasdaq's next-biggest drag was chipmaker Broadcom Inc , which finished down 17.4%, followed by ChatGPT backer Microsoft, which fell 2.1% and then Google parent Alphabet, which ended down 4.2%.
The Philadelphia semiconductor index tumbled 9.2%, for its biggest percentage drop since March 2020 and its biggest decliner was Marvell Technology, which tumbled 19.1%.
US equity declines followed a selloff that started in Asia, with Japan's SoftBank Group finishing down 8.3%, and moved through Europe where ASML fell 7%.
Why was Nvidia badly affected?
"If it's true that DeepSeek is the proverbial 'better mousetrap,' that could disrupt the entire AI narrative that has helped drive the markets over the last two years," said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.
"It could mean less demand for chips, less need for a massive build-out of power production to fuel the models, and less need for large-scale data centres."
The hype around AI has powered a huge inflow of capital into equities in the last 18 months, inflating valuations and lifting stock markets to new highs.
US President Donald Trump said that DeepSeek should be a "wakeup call" and could be a positive development. In their flight from risk on Monday, investors sought out safe-haven government bonds and currencies. The benchmark U.S. Treasury 10-year yield fell to 4.53% while in currencies Japan's yen and the Swiss franc rallied against the U.S. dollar.
The increased volatility in tech stocks will prompt banks to adjust their risk management, potentially holding fewer shares or managing positions more carefully as clients unwind their holdings, said one trading executive who declined to be identified discussing his company's actions.
After the release of the first Chinese ChatGPT equivalent, made by search engine giant Baidu , there was widespread disappointment in China over the gap in AI capabilities between US and Chinese firms.
But the apparent quality and cost-efficiency of DeepSeek's models changed this view, with Silicon Valley executives showering praise on DeepSeek-V3 and DeepSeek-R1. Little is known about the Hangzhou startup behind DeepSeek, whose controlling shareholder is Liang Wenfeng, co-founder of quantitative hedge fund High-Flyer, based on records.
Its researchers wrote in a paper last month that DeepSeek-V3 model, launched on January 10, used Nvidia's lower-capability H800 chips for training, spending less than $6 million.
DeepSeek-R1, released last week, is 20 to 50 times cheaper to use than OpenAI's o1 model, depending on the task, according to a post on DeepSeek's official WeChat account.
"If it's true that DeepSeek is the proverbial 'better mousetrap,' that could disrupt the entire AI narrative that has helped drive the markets over the last two years," said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.
"It could mean less demand for chips, less need for a massive build-out of power production to fuel the models, and less need for large-scale data centres."
The hype around AI has powered a huge inflow of capital into equities in the last 18 months, inflating valuations and lifting stock markets to new highs.
US President Donald Trump said that DeepSeek should be a "wakeup call" and could be a positive development. In their flight from risk on Monday, investors sought out safe-haven government bonds and currencies. The benchmark U.S. Treasury 10-year yield fell to 4.53% while in currencies Japan's yen and the Swiss franc rallied against the U.S. dollar.
The increased volatility in tech stocks will prompt banks to adjust their risk management, potentially holding fewer shares or managing positions more carefully as clients unwind their holdings, said one trading executive who declined to be identified discussing his company's actions.
After the release of the first Chinese ChatGPT equivalent, made by search engine giant Baidu , there was widespread disappointment in China over the gap in AI capabilities between US and Chinese firms.
But the apparent quality and cost-efficiency of DeepSeek's models changed this view, with Silicon Valley executives showering praise on DeepSeek-V3 and DeepSeek-R1. Little is known about the Hangzhou startup behind DeepSeek, whose controlling shareholder is Liang Wenfeng, co-founder of quantitative hedge fund High-Flyer, based on records.
Its researchers wrote in a paper last month that DeepSeek-V3 model, launched on January 10, used Nvidia's lower-capability H800 chips for training, spending less than $6 million.
DeepSeek-R1, released last week, is 20 to 50 times cheaper to use than OpenAI's o1 model, depending on the task, according to a post on DeepSeek's official WeChat account.
AI's "Sputnik moment"
Marc Andreessen, the Silicon Valley venture capitalist, said in a post on X on Sunday that DeepSeek's R1 model was AI's "Sputnik moment," referencing the former Soviet Union's satellite launch that marked the start of the space race in the late 1950s.
"DeepSeek R1 is one of the most amazing and impressive breakthroughs I've ever seen - and as open source, a profound gift to the world," he said in a separate post.
However, Daniel Morgan, senior portfolio manager at Synovus Trust Company, which owns almost a million Nvidia shares, called Monday's selloff an over-reaction.
Morgan said that because DeepSeek's AI model is for use on mobile phones and PCs rather than data centres, it competes with ChatGPT, Meta Platforms and Alphabet's Gemini.
"The real money in AI is providing the chips for the data centres from the likes of (Nvidia), Advanced Micro Devices and Broadcom," said Morgan. "Overall, I view the AI tech selloff today as an opportunity to add high-quality tech shares on weakness."
Nvidia fell $24.20 on Monday to end at $118.42. The stock, now down 11.8% for the year to date, rose 171% in 2024 and about 239% in 2023 to trade at 56 times the value of its earnings as investors saw it as the best way to bet on the emergence of AI technology. Nvidia shares were up 2.5% in after-hours trading on Monday.
Marc Andreessen, the Silicon Valley venture capitalist, said in a post on X on Sunday that DeepSeek's R1 model was AI's "Sputnik moment," referencing the former Soviet Union's satellite launch that marked the start of the space race in the late 1950s.
"DeepSeek R1 is one of the most amazing and impressive breakthroughs I've ever seen - and as open source, a profound gift to the world," he said in a separate post.
However, Daniel Morgan, senior portfolio manager at Synovus Trust Company, which owns almost a million Nvidia shares, called Monday's selloff an over-reaction.
Morgan said that because DeepSeek's AI model is for use on mobile phones and PCs rather than data centres, it competes with ChatGPT, Meta Platforms and Alphabet's Gemini.
"The real money in AI is providing the chips for the data centres from the likes of (Nvidia), Advanced Micro Devices and Broadcom," said Morgan. "Overall, I view the AI tech selloff today as an opportunity to add high-quality tech shares on weakness."
Nvidia fell $24.20 on Monday to end at $118.42. The stock, now down 11.8% for the year to date, rose 171% in 2024 and about 239% in 2023 to trade at 56 times the value of its earnings as investors saw it as the best way to bet on the emergence of AI technology. Nvidia shares were up 2.5% in after-hours trading on Monday.
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