Chinese AI Startup DeepSeek Triggers Massive Global Tech Sell-Off
A new AI model from China's DeepSeek causes Nvidia and other major tech stocks to plummet, sparking serious doubts about America's dominance in artificial intelligence.
Nvidia and other major U.S. technology firms plunge as Chinese startup DeepSeek triggers a massive global sell-off. The chip designer drops nearly 17%, putting the stock on track for its worst day since March 2020. Other AI-linked companies follow suit, with Micron, Arm Holdings, and Broadcom all suffering double-digit losses.
The market panic stems from DeepSeek's release of a highly efficient, open-source large language model. The Chinese company claims it develops the AI model in just two months for under $6 million, which represents a drastic reduction in cost compared to Western counterparts. Furthermore, a newly released reasoning model reportedly outperforms OpenAI's latest offerings in several third-party tests.
The sell-off extends internationally, hitting European and Asian chipmakers hard, while U.S. energy stocks tied to AI power demands also plummet. Despite the market turmoil, an Nvidia spokesperson praises DeepSeek as an excellent AI advancement that relies on export-compliant computing. The dramatic stock decline reflects growing Wall Street anxiety over the massive amounts of money big tech companies currently pour into AI infrastructure.