Nvidia shares closed down almost 17%, posting its biggest drop since March 2020 and erasing nearly $600 billion from the company's market cap. Broadcom fell 17.4%, and other chip stocks like Micron declined 11.

The S&P 500 and the Nasdaq fell sharply on Monday, led by Nvidia and other chipmakers as popularity of a low-cost Chinese artificial intelligence model raised investor worries about the outlooks for current AI leaders in the United States.

Nvidia crossed below its 200 day moving average for the first time since 2023 this week. Analysts say the correction could deepen.

A new Chinese AI model threatens to diminish the need for Nvidia’s most-expensive chips, but some say the concerns are overblown.