Tech Giants Stumble: DeepSeek's AI Disruption Causes Market Shock

Tech markets wobbled as a Chinese AI startup, DeepSeek, challenged U.S. dominance, triggering the steepest ever decline in Nvidia’s value. The model’s cost-effective claim caused tech stocks worldwide to tumble, raising fears of a broader market correction. Retail investors capitalized on Nvidia's dip, hoping for rebound.

Technology stocks steadied after a turbulent start to the week, following a historic dip in Nvidia's market value on Monday. The drop was caused by the surprising release of a low-cost AI model by China's DeepSeek, challenging the market dominance of major U.S. players.

Nvidia shares, which fell by 17% on Monday, shedding a record $593 billion in market value, saw a modest recovery. By Tuesday, Nvidia was up by 5% in premarket trading, buoyed by a surge in retail investor interest. The tech shock had reverberations across major exchanges in Europe, Asia, and North America.

Industry leaders reacted swiftly to DeepSeek's entry. OpenAI's Sam Altman praised the model, dubbing it 'impressive,' while U.S. President Donald Trump called it a 'wakeup call' for American industries. The rapid turn of events has spurred intense speculation about market shifts and the viability of current valuations for technology stocks.

(With inputs from agencies.)