Wall Street Tumbles as Low-Cost Chinese AI App DeepSeek Shakes Tech Sector
U.S. stock markets experience a major sell-off as a new Chinese artificial intelligence model raises serious doubts about Silicon Valley's massive AI investments. Chip giant Nvidia leads the decline as investors question the high cost of building AI infrastructure.
U.S. tech stocks plunge as Wall Street reacts to DeepSeek, a Chinese artificial intelligence company that introduces a surprisingly low-cost AI model. The new AI assistant quickly becomes the most downloaded free app on Apple's U.S. app store, overtaking OpenAI's ChatGPT and sparking panic among investors.
Chip giant Nvidia sees its stock drop more than 13%, while rivals like Arm and Broadcom also experience significant losses. This massive chip sell-off drags down the broader market, causing the tech-heavy Nasdaq to fall almost 600 points, or nearly 3%, by late morning.
DeepSeek claims its models cost less to train and operate without requiring the most advanced chips, which directly challenges the billions of dollars that Google, Microsoft, Apple, and Meta pour into their AI arms race. Investors prepare to question these big tech companies about their expensive AI strategies as Meta, Apple, Microsoft, and Tesla prepare to report their quarterly earnings this week.