What just happened? Nvidia has once again broken the record for the largest one-day decline of market value in US history. After the release of the open-source R1 AI model by Chinese startup DeepSeek, which caused panic within the industry, Team Green's shares dropped 17%, resulting in its market cap falling by almost $600 billion. Nvidia's stock price crashed to $118.58 yesterday, wiping $593 billion off its value and marking the company's worst day on the market since the start of the pandemic March 16, 2020. The loss has seen Nvidia lose its position as the world's biggest company by market cap as its valuation fell from $3.5 trillion to $2.9 trillion, making it less valuable than Apple and Microsoft.Nvidia's crash was the result of DeepSeek's free, open-source large language model called R1 that launched last week and is now the top app in the US Apple App store. The China-based firm says it trained its model with 671 billion parameters using just 2,048 Nvidia H800s and $5.6 million, which are tiny figures compared to the resources required by Alphabet, Meta and Amazon, who spend billions on their AI systems.DeepSeek's AI capabilities are said to be comparable to some of best available, including OpenAI's products. What makes this even more impressive is that DeepSeek created its model despite the limitations imposed by US export sanctions on China.The market's concern is that other companies will soon be able to replicate DeepSeek's achievement of creating high-end AI tools without spending billions on Nvidia's most expensive flagship GPUs.Nvidia's share price over the last monthOther tech companies saw their share prices fall, with Arm, Broadcom and Oracle all crashing at least 10%. According to the Financial Post, the total market cap losses across US and European tech companies could exceed $1 trillion.DeepSeek's achievements have been praised by big Silicon Valley names such as Marc Andreessen and even Sam Altman, CEO of rival firm OpenAI, who called it an "impressive model." // Related Stories"We will obviously deliver much better models and also it's legit invigorating to have a new competitor!" Altman wrote.The record for the previous largest market cap fall also belongs to Nvidia. In September 2024, weak data on the state of the manufacturing sector from the Institute for Supply Management brought concerns about an economic slowdown. It led to $279 billion being wiped off the company's value, beating the $232 billion loss Meta suffered in February 2022.Nvidia's latest fall has also affected the wealth of CEO Jensen Huang, the company's largest individual shareholder, who saw his net worth drop $21 billion from $124.4 billion to $103.1 billion.