After the CEO of the world's most valuable company declared that the United States could lose the technological race to China, everything changed.
In three days, Nvidia lost $800 billion in market value—and the context reveals much more than a one-off correction.
Jensen Huang's statement in an interview with the Financial Times:
"China will win the artificial intelligence race."
He cited excessive regulations in the US and highlighted China's progress with state support and energy subsidies.
Since then, Nvidia's stock has fallen by -16%, one of the biggest corrections for a big tech company since the start of the AI rally.
On Friday alone, the loss was almost -5%.
That's a lot when the company is worth more than $4 trillion.
After the negative reaction, Huang released a statement retracting his statement, saying that China is "nanoseconds behind" the US in this race.
But the market remained under pressure.
The following day, the press revealed that the American government is considering banning sales even of Nvidia chips created specifically for China.
The detail that went unnoticed: Huang had met with Donald Trump just a few days prior.
And shortly after that meeting, Trump met with the President of China, Xi Jinping.
Everything seemed connected, but little information reached the public.
What happened behind the scenes?
While the episode heightens tensions in the technology sector, the market as a whole has entered a correction.
The S&P 500 has fallen more than -3% in the last 5 days, with over $1.8 trillion wiped out in market value.
Right in the middle of this correction, Michael Burry, the fund manager who predicted the 2008 crisis, revealed a huge short position against the companies that symbolize the current AI rally: Nvidia and Palantir.
His firm bought 1 million put options on Nvidia and 5 million on Palantir.
Since the disclosure of the position, Palantir has fallen -16%, losing more than US$75 billion in market value.
Much of the bad mood also seems to be related to the US government shutdown, which entered its 38th day today—the longest in history.
The FAA began canceling 700 flights a day, affecting more than 4 million passengers and worsening the economic impact.
Moody's estimates losses of $30 billion per week due to the shutdown.
If it lasts until the end of November, the total cost could exceed $250 billion.
Meanwhile, 42 million Americans are still not receiving benefits from SNAP, the country's main food assistance program.
The fiscal situation is worsening, and all of this seems to be directly affecting public confidence.
The University of Michigan's consumer sentiment index fell to 50.3 points—the second-worst level in the historical series, even lower than that recorded during the 2008 crisis.
The moment is sensitive: the AI market is showing signs of tension, trading at high multiples, with the indices heavily concentrated in these companies.
Furthermore, consumer confidence is crumbling and the government is paralyzed.
Episodes like Nvidia's are not isolated. They expose the complexity of a scenario where politics, technology, and economics are intertwined.