DeepSeek's AI Assistant Takes Wall Street by Storm, Chips Crumble

The S&P 500 and Nasdaq dropped after a Chinese AI model by DeepSeek challenged major chipmakers like Nvidia. DeepSeek's AI Assistant topped U.S. App Store charts, unsettling investments across sectors, with tech stocks leading the decline. Rising volatility added to market uncertainty.

In a dramatic start to the week, the S&P 500 and Nasdaq witnessed declines as the prominence of a Chinese artificial intelligence model from DeepSeek impacted chipmaker stocks such as Nvidia.

DeepSeek's innovative AI model, utilizing cheaper resources, disrupted the financial markets' focus on AI-powered supply chains. The company's AI Assistant quickly became the U.S. App Store's top-rated free app, surpassing ChatGPT.

As investor confidence wavers, key technology stocks, including Microsoft, Meta, and Alphabet, stumbled, with Nvidia and semiconductor stocks being hit hardest by recent developments. Volatility surged, reflecting the market's mounting apprehension.

(With inputs from agencies.)