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NEW YORK: Nvidia led a tech stock rout yesterday as Chinese startup DeepSeek unveiled a low-cost generative AI model, shaking confidence in American dominance in the burgeoning AI industry.
DeepSeek’s chatbot, developed for just $5.6 million, rivaled US models costing billions, becoming the top-rated free app on Apple’s US App Store. Nvidia’s shares dropped 17%, erasing nearly $600 billion in market value, while the Nasdaq fell over 3%.
“The focus is now on whether China can do AI better, quicker, and cheaper,” said Kathleen Brooks, research director at XTB.
Chipmakers Broadcom and Dutch ASML saw stocks tumble, while Constellation Energy sank over 20%. Meanwhile, DeepSeek faced “malicious” cyberattacks, limiting user registrations.
With AI giants Meta and Microsoft set to report earnings this week, global markets remain on edge, questioning whether China can overtake the US in the AI race.
