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US tech companies plunged into pre-market trading as Chinese startup DeepSeek raised concerns about AI competitiveness and America’s leadership in the sector, prompting a global sell-off.
Chip designer stocks Nvidiaa Big beneficiary of AI hypeThey were down 9.84% at 5:11 a.m. ET before the market open. Chip companies based in the Netherlands ASML and ASM International European trade decreased by 10.59% and 14.94% respectively, while in Asia Japanese chip-related stocks were sharply lower.
DeepSeek launched a free, open-source model of the large language in late December, saying it had been developed for the year. just two months At a cost of less than 6 million dollars — a much smaller expenditure than requested by the Western members. Last week, the company also released a reasoning model seems to have had a higher performance OpenAI’s latest in many third-party tests.
The developments have raised questions about the amount of money big tech companies have invested in AI models and data centers.
“DeepSeek clearly doesn’t have access to as much computing as US hyperscalers and somehow managed to develop a model that looks very competitive,” Raymond James semiconductor analyst Srini Pajjuri said in a note on Monday.
– CNBC’s Lee Ying Shan and Michael Bloom contributed to this story.
This latest news is being updated.
