US stock markets experienced a significant dip on Monday as shares of major technology companies tumbled. The Nasdaq Composite dropped just over 3%, and the S&P 500 shed 1.46%, with analysts attributing the fall to the rise of China’s AI chatbot, DeepSeek.
AI-related tech giants felt the brunt of the downturn. Broadcom and AMD saw their shares fall by 17% and 6% respectively. Notably, US chip manufacturer Nvidia faced a nearly 17% drop, losing close to $600 billion in market value in a single day.
This market volatility comes in the wake of DeepSeek becoming the most downloaded application on Apple’s US App Store. Developed by a Hangzhou-based company in 2023, DeepSeek is a free, open-source large language model built using Nvidia’s H800 chips. The development and training of DeepSeek reportedly cost around $6 million, challenging the belief that significant investments are required for advanced AI development.
An Nvidia spokesperson described DeepSeek as an “excellent AI advancement,” emphasizing how companies can leverage existing models to create innovative AI solutions.
Addressing House Republicans on Monday, US President Donald Trump acknowledged the emergence of DeepSeek as a “positive” development. He stated, “It shows such progress can be achieved at a lower cost.” However, he also urged American industries to enhance their competitiveness, calling the situation “a wake-up call” to remain focused on leading in AI technology.
Financial leaders echoed these sentiments. Nasdaq Vice Chairman John McCoy told China Media Group, “AI will continue to be one of the most important revolutions. DeepSeek is going to be an important aspect of that.”
Industry experts believe DeepSeek’s success marks a significant milestone in China’s AI capabilities. They advocate for international collaboration in developing advanced AI technologies for the global good.
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DeepSeek causes top AI stocks to tumble as Trump warns US companies
cgtn.com
