The only REAL explanation as to why Nvidia, $NVDA, crashed today:

1. Clearly, DeepSeek has become a leader in AI innovation with Nvidia calling it an "excellent AI advancement"

2. In theory, AI advancement is BULLISH for Nvidia because it means more chip demand

3. The issue is that DeepSeek is in China, a highly regulated country in the midst of a trade war with the US

4. This means Nvidia can likely only sell their weaker H800 chips in mass quantities to DeepSeek, not the leading H100 chips that are $30,000+ each

5. Even as DeepSeek holds LESS ADVANCED chips, China was effectively able to generate an AI model that is 96% cheaper more efficient and 90%+ cheaper

6. Meanwhile, their AI model is FREE compared to relatively expensive ($200+ per month) and less efficient AI models like ChatGPT

7. It appears that China has begun to innovate at speeds that were previously believed to be impossible. US tech assumed its dominance was impossible to dethrone

8. Large cap tech in the US is now facing reality, they can get a better AI model for FREE and it's only getting better. Why pay a premium for a worse product?

9. The next response may be US restrictions on DeepSeek or chip exports to China (as we have seen for months) but this clearly is not working

10. If Nvidia can find a way to tap into newly created demand from the advancement of DeepSeek, this dip will be viewed as a gift

11. Ultimately, AI competition for both hardware and software is picking up, no company is "safe," and the rate of innovation is only going to accelerate

Large cap US tech was blindsided today, but innovation is about to enter a whole new realm.

The AI race is on.