Wall Street faced a major shock on Monday as Chinese AI startup DeepSeek emerged as a formidable competitor, triggering a sell-off in US tech stocks. NVIDIA, one of the biggest beneficiaries of the AI boom, saw its stock plunge by almost 17%, closing at $118.58 .
This came after DeepSeek, a Chinese startup founded in 2023, announced its latest AI model, R1, which reportedly matches US-developed models like OpenAI’s ChatGPT at a fraction of the cost.
The news unsettled investors, who fear that such advancements could disrupt the lucrative AI supply chain that has driven Silicon Valley’s growth. “This is AI’s Sputnik moment,” venture capitalist Marc Andreessen told news agency AP.
The impact was immediate and widespread. The S&P 500 dipped 1.7%, with tech stocks suffering the brunt of the losses. Shares of Microsoft and Meta Platforms, both heavily invested in AI infrastructure, saw sharp declines, while bond yields fell as investors sought safer assets.
