Chinese artificial intelligence startup DeepSeek rocked global technology stocks Monday. Nvidia shares fell around 9% in premarket trading. In Europe, tech stocks led market losses, with shares of chip equipment maker ASML also down as much as 11%.
The little-known startup’s AI assistant has rocketed to the top of the app download charts since it was released last week with capabilities widely seen as being competitive with the likes of OpenAI and Meta’s technology. The worrying part for its US rivals? It claims to have done so without having spent billions on cutting-edge chips. Investor Marc Andreessen hailed it as “one of the most amazing and impressive breakthroughs.”
The revelation is prompting a major rethink about the big boys in AI’s massive spending needs, triggering doubts about the sky-high valuations for companies like Nvidia. More broadly, it has called into question the widely assumed lead the US has in AI.