DeepSeek Disruption: Chinese AI Challenger Shakes Tech Giants

A new low-cost AI model from Chinese startup DeepSeek has rattled global technology markets, challenging industry leaders like Nvidia. The model's efficient performance led to significant stock sell-offs, with major impacts on companies such as Nvidia, Broadcom, and Microsoft. The development suggests a new era of accessible AI applications.

On Monday, investors began divesting from key technology stocks worldwide, from Tokyo to New York, amid concerns over a new low-cost AI challenger from China, DeepSeek. The startup's free AI assistant has rapidly surpassed U.S. rival ChatGPT in downloads, causing a 3% drop in the tech-heavy Nasdaq.

Notably, Nvidia experienced a nearly 17% drop, facing a potential $600 billion loss in market value. Broadcom and Google's parent company, Alphabet, also suffered, contributing to the steep decline of the Philadelphia semiconductor index, which saw its biggest fall since March 2020.

The emergence of DeepSeek's models has sparked discussions about changing demand dynamics in AI, potentially leading to less need for high-powered data centers but greater accessibility to AI technology. Meanwhile, investors have turned to safe-haven assets, with significant interest in government bonds and stable currencies.

(With inputs from agencies.)