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Nvidia investors wiped nearly $600 billion from the chip maker’s value on Monday. Nvidia stock is down 15% on a 5-day rout because of a new Chinese AI company called DeepSeek. And it might be just the beginning. 

Nassim Taleb, known for forecasting ‘Black Swans’, told Bloomberg News on Tuesday that Nvidia’s performance is just an idea of what investors who blindly invested in AI are going to face. 

But American AI companies are fighting back. OpenAI announced on Thursday that it has signed an agreement with the U.S. National Laboratories to “supercharge their scientific research using our latest reasoning models.” 

OpenAI said that sharing its technology with the nation’s top scientists “aligns with our mission of building generative AI to benefit humanity, and we believe the U.S. government is a critical partner to achieve this goal.” 

OpenAI is also claiming that DeepSeek, the low cost high-performance Chinese genAI, distilled its knowledge out of OpenAI’s models.

The Chinese startup AI model seems to rival ChatGPT’s performance at a fraction of its costs, making markets question whether the amount of money deployed to OpenAI, Nvidia, and its US peers has really been worth it. 

Amid the AI community, however, DeepSeek’s impact on US tech stocks was not taken as a surprise. “DeepSeek is a proof that everything was a matter of architecture and modeling optimization” said Dimas Timmers, an entrepreneur leading research and development in human-centered AI. 

He claims that OpenAI’s gigantic machine learning architectures are inefficient in the long run and DeepSeek created a way to use reinforcement learning and latent space. 

“They did something really stupid but brilliant, it gave the AI time to think. The result is 95% cheaper, just because it optimized the architecture.

On the other hand, investors are taking a different approach. Alastair Rampell, general partner at Andreessen Horowitz, wrote on a FreePress post that by making its model open-source, the Chinese hedge fund behind DeepSeek “has confirmed how counterproductive the Biden administration’s pro-containment, pro-hegemony, anti-open source AI strategy had been.” 

Rather than blaming the US companies’ performance, Rampell recalled that former President Joe Biden issued an executive order “which sought to constrain computers under an arbitrary threshold, bar open source as an alleged threat to national security, and effectively allow regulatory capture by the biggest players.”

On LinkedIn, Jean Boivin, Head of the BlackRock Investment Institute, Global Head of Research at BlackRock, noted that “it is much too soon to conclude that capital spending by U.S tech on the AI buildout is overdone.”

Nvidia stock rose 3.16% on Thursday as investors reiterated their pick on the AI chipmaker ahead of its Q4 earnings report on Feb. 28. 

While longer-term risks such as the emergence of DeepSeek triggered an Nvidia selloff last month, analysts from Morgan Stanley said the firm’s near-term business prospects remains strong, and “Blackwell supply visibility continues to build.” Blackwell is a graphics processing unit (GPU) microarchitecture developed by Nvidia.

Nvidia stock is still down 9% from its record high. While investors are still cynical, Morgan Stanley analysts, “remain very optimistic on how the balance of the year plays out,” as demand is strong for Blackwell in all forms. 

On Thursday, Hewlett Packard Enterprise (HPE) announced that it has shipped its first Blackwell family-based solution. The company said in a press statement that the system is designed to help service providers and big companies quickly deploy large, complex AI clusters with liquid cooling solutions to optimize efficiency and performance. HPE shares closed the day up 0.90%. 

Morgan Stanley analysts Joseph Moore, Mason Wayne, Ella Tulchinsky, and Shane Brett said DeepSeek is a strong evolutionary upgrade in the AI space, “but one of many that took place in the last year”. 

“It is similar to Alibaba’s latest release, or Google’s Gemini flash 2 release,” they wrote.  “Talking to our cloud contacts, we are hearing that none of this changes the plans of any of the major participants.”

Analysts also believe the selloff in AI stocks could set up a different financing environment, since in the past year any advancement in AI was viewed positively. 

“Now there is likely to be somewhat more scrutiny, given the perceptions around limitations on scaling,” they argued.

Total credit card balances increased to $914 billion between July and December 2024, according to a report released by the Philadelphia Fed Wednesday. This figure represents the highest credit card balance since the Philadelphia Fed began tracking this data in 2012.

The percentage of credit card accounts making only the minimum payment each month also reached a 12-year high of 10.75%. “Consumers are not only spending more, leading to higher balances, but paying off less, increasing revolving amounts,” the report said.

This surge in credit card debt and consumers making only the minimum payments on their cards underscores growing economic pressures on American households. Already belabored by high interest rates and stubborn inflation, the high price of living has not abated as slowly as most Americans have hoped.

These concerning statistics on credit card debt come alongside the Federal Reserve’s decision to hold interest rates steady on Wednesday in an effort to slow inflation. While the Federal Reserve believes that their strategy has had “meaningful effects in bringing inflation under control,” Americans are experiencing a very different reality.

Case in point: 59% of credit card holders used their credit to purchase groceries in the last 3 months, according to a December 2024 report from PYMNTS Intelligence. The report further highlights that the most common use for credit among American consumers is purchasing essential household goods, not frivolous items.

“Inflation down to 2%…is what we’re trying to achieve,” said Federal Reserve Chairman Jerome Powell to reporters on Wednesday. “Consumers will pick that up, of course, in the things that they buy at the grocery store.”

American total household debt hit a record $18.04 trillion in the last quarter of 2024, propelled by a rise in credit card debt and auto loan balances, according to a new report released by the New York Federal Reserve on Thursday.

This increase in American debt – up $93 billion from the third quarter of 2024 – signals the persistent impact of rising inflation on household budgets. This impact was confirmed by a 0.5 percent increase in the Consumer Price Index (CPI) for January 2025 released Wednesday, which brought the total increase in CPI to 3 percent over the last 12 months.

Auto loans in particular, where American debt now totals $1.7 trillion, accounted for a substantial share of the household debt increase reported by the New York Fed. Outstanding auto loan balances increased by $11 billion over the third quarter of 2024. Delinquency rates of auto loans are also rising as more Americans struggle to keep up in the current inflationary environment.

Federal Reserve researchers highlighted high vehicle prices—an effect of the global pandemic—as a reason why so many American borrowers have fallen behind on their auto loan payments. Unlike mortgages, researchers say, auto loan payments impact a uniquely wide band of American consumers.

“Nearly all borrower groups have seen delinquency rates rise beyond their pre-pandemic levels,” New York Federal Reserve analysts reported.

The report from the New York Federal Reserve also indicated a specific spike in auto loan debt among Americans aged 18-29. A sharp rise in auto loan delinquencies continues to impact those in lower income brackets, where young Americans are most likely to fall.

“For auto loans, higher car prices combined with higher interest rates have driven monthly payments upward and have put pressure on consumers,” New York Federal Reserve analysts reported in a February 2025 blog post.

Blackstone profits hit a record low in 2023 within 5 years but seeks out new ventures.

Blackstone’s earnings in 2023 plunged and it is trying to make up.

The investment firm’s 2023 revenue slumped to $7.59 billion, dropping nearly 5.3% from 2022. The net income also fell to $1.39 billion and decreased to 20% from last year. Besides, the profit margin was also down from 22% to 18% due to lower revenue.

According to the Wall Street Journal, the main reason for the huge loss was because of the decline in the value of their real estate investments. A third of Blackstone’s assets are in real estate.

Stephen A. Schwarzman, Chairman and CEO of Blackstone, said, “Blackstone reported strong fourth-quarter results, as we exited a volatile year for global markets are exceptionally well positioned for the road ahead with nearly $200 billion of dry powder capital to invest.”

Blackstone also bets on the AI revolution according to a latest report from Bloomberg. They bought the QTS (a data center operated in Phoenix) in 2021 and they are constructing the data center near the highway of Phoenix.

Blackstone also hired Thomas Nides as their vice chairman for strategy and client relations. Nides, 62, a veteran of Morgan Stanley and Deputy Secretary of State and ambassador to Israel.

Tesla trimmed off nearly 10% of its employees globally through last week.

After Tesla announced the unprecedented layoff, Tesla’s stock price plunged to $140.56 per share which was the lowest level within a year.

It retracted all the new graduates’ offers in China and thousands of people were laid off. Some employees in Europe.

On Tuesday, Tesla reported its first-quarter earnings. The revenue fell 9% to $21.3 billion and dropped 55% YOY points to $1.13 billion. Besides, Tesla recalled 3878 cyber trucks according to a WSJ report.

“We should be considered an AI or robotics company,” Elon Musk told investors. “If somebody doesn’t believe Tesla will solve autonomy, I think they should not be an investor in the company. But we will. And we are.”

Underperformed stock prices and it is facing the most competitive competition with China’s EV market. Tesla’s sales revenue has slumped due to the domestic EV market