Tech stocks shake as a Chinese competitor threatens to topple their AI domination; Nvidia down 11%

Wall Street is tumbling Monday on fears that the market’s winners who have feasted on the artificial-intelligence frenzy are under threat from a competitor in China that can do similar things for much cheaper.

The S&P 500 was down 1.6% in morning trading. Big Tech stocks took some of the heaviest losses, with Nvidia down 11.2%, and they dragged the Nasdaq composite down 2.7%. The Dow Jones Industrial Average, which has less of an emphasis on tech, was holding up better with a dip of 123 points, or 0.3%, as of 9:50 a.m. Eastern time.

The shock to financial markets came from China, where a company called DeepSeek said it had developed a large language model that can compete with U.S. giants but at a fraction of the cost. DeepSeek’s app had already hit the top of Apple’s App Store chart by early Monday morning, and analysts said such a feat would be particularly impressive given how the U.S. government has restricted Chinese access to top AI chips.

In Amsterdam, Dutch chip supplier ASML slid 8.5%. In Tokyo, Japan’s Softbank Group Corp. lost 8.3% and is nearly back to where it was before spurting on an announcement that it was joining a partnership trumpeted by the White House that would invest up to $500 billion in AI infrastructure.

Source: THESUNCHRONICLE