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Nvidia Faces Historic Market Loss As DeepSeek Dents Confidence In AI’s Future

by THEFUTURE.TEAM

January 28, 2025

Nvidia experienced the largest single-day market cap drop in history on Monday, as its stock tumbled by 17%, shedding nearly $600 billion in value. This staggering loss is directly linked to a new development in the AI space—DeepSeek, a Chinese AI firm that unveiled its version of ChatGPT, raising concerns over the cost-efficiency and competitive positioning of U.S. AI companies.

Key Details

Nvidia’s shares experienced a severe decline, marking its worst daily percentage drop since March 2020, during the initial shock of the COVID-19 pandemic. On Monday, Nvidia lost a record-breaking $589 billion in market capitalization, more than doubling the previous one-day loss of $279 billion in September 2024. To put it into perspective, this is significantly more than Meta’s $251 billion market cap loss in February 2022.

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As a result, Nvidia’s market valuation dropped from $3.5 trillion to $2.9 trillion, slipping behind Apple and Microsoft as the world’s most valuable company. Nvidia’s dramatic fall led a broader retreat in U.S. stocks, with the S&P 500 losing 1.5% and the Nasdaq dropping 3.1%. Other major players in the AI industry, such as chipmakers Arm and Broadcom, alongside Oracle, saw their stocks plummet by at least 10%.

The DeepSeek Effect

The cause of Nvidia’s catastrophic loss lies in DeepSeek’s release of its large-language model, which has cast doubt on the continued dominance of U.S. companies in generative AI. Initially, this might not seem like a negative development for Nvidia, as DeepSeek’s model was also powered by Nvidia’s powerful graphics processing units (GPUs), just like many other AI technologies. However, DeepSeek revealed that it spent just $5.6 million on Nvidia’s technology to develop its model. While experts believe this figure is likely a significant underestimation, it still calls into question the very foundation of Nvidia’s meteoric stock rise.

In recent years, Nvidia’s profits have skyrocketed, with projections indicating net profits could soar from $4.8 billion in 2022 to $66.7 billion in 2024, largely due to the soaring demand for its high-priced GPUs, which can cost up to $25,000 each. U.S. tech giants such as Meta, Tesla, and OpenAI have been among Nvidia’s biggest customers. However, if companies like these can replicate DeepSeek’s cost-efficient approach by using cheaper GPUs, Nvidia could face significant challenges in maintaining its market dominance.

As Ed Yardeni of Yardeni Research pointed out, this shift could be an unwelcome development for Nvidia.

Surprising Statistic

Nvidia’s near-$600 billion market cap loss on Monday exceeds the market values of all but 13 American companies, surpassing industry giants like UnitedHealth, Exxon Mobil, and Costco.

CEO’s Losses

Nvidia CEO Jensen Huang saw his wealth take a massive hit, losing $21 billion in a single day. His net worth dropped from $124.4 billion to $103.1 billion, according to Forbes estimates. Huang remains the largest individual shareholder in Nvidia, owning a 3% stake in the company.

Nvidia’s colossal market cap loss highlights the growing uncertainties in the AI sector, as DeepSeek’s cost-effective alternative to American AI models threatens to disrupt the industry’s balance. With AI becoming an increasingly competitive and global field, Nvidia’s future may hinge on how it adapts to these emerging challenges.

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Binance Details Months-Long Cyberattack Behind $6.34 Billion Crypto Theft

by THEFUTURE.TEAM

November 4, 2026

Binance has disclosed how attackers used fake software downloads, fraudulent job interviews and compromised internal tools to breach its wallet infrastructure in an October 29 cyberattack that resulted in the theft of more than $6 billion in digital assets.

The incident was not caused by a single employee mistake, Binance co-CEO Richard Teng told CNBC’s “Squawk on the Street”. Instead, attackers spent months building access before reaching the system responsible for authorising wallet transactions.

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“They spent months building their way in,” Teng said, describing a sequence involving a compromised developer tool, malware hidden in a coding exercise and access to internal AI systems.

How Attackers Reached Binance’s Wallet Infrastructure

According to Binance’s security report, the operation began in June when a Wallet DevOps engineer downloaded a modified Homebrew installation while searching online for a popular AI coding tool.

Binance detected suspicious activity, replaced the engineer’s device and rotated credentials. However, the company said the engineer’s role and the work of colleagues on the wallet infrastructure team had already been exposed.

In September, attackers allegedly posed as recruiters and interviewed another engineer. A coding exercise contained hidden malware designed to evade security controls, Teng said. The attackers subsequently moved through internal AI tools and gained access to the system authorising wallet transactions.

Teng did not directly attribute the attack to North Korea, but said the FBI had linked it to North Korean hackers associated with the TraderTraitor group.

Binance Recovers Most Affected Assets

Binance said it has replenished 98% of the $6.34 billion in affected assets and is working to acquire the remaining, less-liquid holdings. The exchange temporarily restricted certain withdrawals, committed to covering customer losses and used its reserves to restore affected funds.

The company and industry partners, including Tether, Circle and Ripple, have reportedly frozen around $3 billion in assets. However, some stolen funds continue to move through laundering channels.

Coinbase has also blocked transfers to compromised wallets and offered assistance to Binance.

Security Overhaul And Industry Confidence

Following the breach, Binance rebuilt the affected wallet system and internal AI tool, replaced compromised devices, revoked credentials and tokens associated with the engineers involved, and expanded security scans across employee devices.

The exchange has also commissioned an independent expert to review its response and security measures. Teng said Binance would continue strengthening its defences while working with law enforcement and industry partners to trace and freeze the stolen funds.

The incident has renewed questions about the security of centralised crypto exchanges. Although Binance maintains that it remains financially sound, attention is now focused on recovering the remaining assets and demonstrating that its security controls can withstand increasingly sophisticated attacks.