Tech stocks fall as China's DeepSeek sparks U.S. worries about the AI race
Nvidia lost nearly $600 billion in market value Monday as tech stocks plunged amid fears that Chinese artificial intelligence firm DeepSeek leapfrogged U.S. dominance in AI development.
Nvidia lost nearly $600 billion in market value Monday as tech stocks plunged amid fears that Chinese artificial intelligence firm DeepSeek leapfrogged U.S. dominance in AI development.
The Nasdaq Composite, which tracks the country's largest tech firms, plunged more than 3%. The Dow ended up nearly 300 points after falling earlier in the day, and the S&P 500 tumbled almost 1.5%.
The sell-off was sparked by advances claimed by China’s DeepSeek, whose outstanding qualities became evident this weekend. The open-source model was first released in December, when the company said it took only two months and less than $6 million to create. Those claims would be far less than the hundreds of billions of dollars that American tech giants such as OpenAI, Microsoft, Meta and others have poured into developing their own models, fueling fears that China may be passing the U.S. in the scale and efficiency of their AI investments.
DeepSeek’s app is now the top free app in the Apple App Store, pushing OpenAI’s ChatGPT into second place.
Among the biggest losers in the stock market slump: chipmaker Nvidia, whose shares plummeted as much as 18%. Nvidia has been among the better performers as of late, with shares soaring more than 200% over the course of the last two years, making it one of the largest companies in the world. Nvidia's losses represent the biggest market value drop in U.S. stock market history, according to Bloomberg.
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