AI-Powered DeepSeek Shakes Stock Market, Eclipsing $1 Trillion in Value
Amidst concerns about artificial intelligence supremacy, US stocks experienced a significant sell-off on Monday, eroding over $1 trillion in market capitalization.
The catalyst for the market turbulence was DeepSeek, an AI app developed by a Chinese startup that reportedly outperforms OpenAI's ChatGPT. DeepSeek's surge in popularity, becoming the most downloaded app on Apple's US App Store, further fueled market anxiety.
Tech stocks bore the brunt of the sell-off, with Nvidia losing a staggering $589 billion in market cap. This unprecedented single-day loss in market value pushed Nvidia down the ranks, dethroning it as the world's most valuable company. Apple, which gained 3% on Monday, now surpasses Nvidia with a market cap of $3.45 trillion.
Other chipmakers also suffered significant declines, with Broadcom and Taiwan Semiconductor Manufacturing Company dropping 17% and 13% respectively.
Angelo Zino, a senior equity analyst at CFRA Research, highlighted the growing threat posed by Chinese innovation: "Investors must take innovation from China seriously. It challenges the current pace of capex spend and technology upgrades."
Analysts believe China's drive for self-sufficiency in AI development stemmed from restricted access to US technologies. David Bahnsen, the CIO of The Bahnsen Group, warned that "China may no longer be solely a customer but could emerge as a formidable competitor."