U.S. Stock Markets Plunge as Chinese AI Rival DeepSeek Shakes Investor Confidence

Wall Street faced a steep sell-off Monday as investors reacted to the rapid rise of Chinese artificial intelligence company DeepSeek, which introduced a new, cost-efficient AI model that has disrupted the market.

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DeepSeek’s app quickly climbed to the top of Apple’s U.S. App Store, surpassing OpenAI’s ChatGPT in downloads. This development has sent shockwaves through Silicon Valley, where tech giants like Google, Microsoft, and Meta have heavily invested in advanced AI systems.

Nvidia, a key player in AI chip technology, saw its stock plummet over 13% by late morning, while other chipmakers like Arm and Broadcom also suffered significant losses. The Nasdaq index dropped nearly 3%, driven by declines across the tech sector.

DeepSeek’s AI model boasts lower training costs and compatibility with less advanced chips, raising questions about the sustainability of Silicon Valley’s high-cost AI investments.

Investors are now awaiting earnings reports this week from major players like Meta, Apple, Microsoft, and Tesla, where company executives are expected to address the growing competitive threat posed by DeepSeek and outline their AI strategies.

Source: NPR