China unveiled its groundbreaking AI model DeepSeek earlier this year turning the digital world upside down rattling the foundations of US-based tech giants like Google Microsoft Open AI and Nvidia. The chipmaker was the biggest casualty of Chinas revolutionary AI invention its stocks eroding by a whopping $600 billion in a single day. The fall of Nvidia According to market data Nvidia has since lost a staggering $1 trillion in market valuation in the last three months with its shares plunging by an alarming 27%. Besides Nvidia which was once considered a rising star in AI sector other major US tech giants including Google Microsoft Open AI and others also suffered significant losses after China unleashed DeepSeek in early January. Microsoft halts work on data centers Earlier this week Microsoft halted work on the construction of new data centers in the US and Europe triggering panic in the AI industry with investors now questioning the profitability of the investments they have made in AI infrastructure in the last two years. As per market analysts investors are losing trust in the AI sector amid rising inflation and an icy cold IPO market. Meanwhile Nvidia the dominant leader in the AI chip market is witnessing a significant slowdown due to the impact of Chinas DeepSeek which was reportedly trained using older generation inferior chips compared to US-based AI companies like OpenAI which use the latest and most powerful Nvidia chips to build their large language models (LLMs). China pushing cheaper AI options Insiders believe that the early excitement surrounding AI is now dying down as was witnessed when an IPO by CoreWeave-- a cloud-computing startup-- failed to garner much interest from investors forcing the company to reduce the price of the its offering as well as the number of shares. According to experts the waning enthusiasm in US AI sector can be attributed to Chinas AI push and the unveiling of its DeepSeek R1 model which changed the perception of how AI models can be trained at a much cheaper cost.