US chip-maker Nvidia led a rout in tech stocks Monday after the emergence of a low-cost Chinese generative AI model that could threaten US dominance in the fast-growing industry.

US chip-maker Nvidia led a rout in tech stocks Monday after the emergence of a low-cost Chinese generative AI model that could threaten US dominance in the fast-growing industry.

The chatbot developed by DeepSeek, a startup based in the eastern Chinese city of Hangzhou, has apparently shown the ability to match the capacity of US AI pace-setters for a fraction of the investments made by American companies.

Shares in Nvidia, whose semiconductors power the AI industry, fell more than 15 percent in midday deals on Wall Street, erasing more than $500 billion of its market value.

The tech-rich Nasdaq index fell more than three percent.

AI players Microsoft and Google parent Alphabet were firmly in the red while Meta bucked the trend to trade in the green.

DeepSeek, whose chatbot became the top-rated free application on Apple’s US App Store, said it spent only $5.6 million developing its model – peanuts when compared with the billions US tech giants have poured into AI.

US “tech dominance is being challenged by China,” said Kathleen Brooks, research director at trading platform XTB.

“The focus is now on whether China can do it better, quicker and more cost effectively than the US, and if they could win the AI race,” she said.

US venture capitalist Marc Andreessen has described DeepSeek’s emergence as a “Sputnik moment” – when the Soviet Union shocked Washington with its 1957 launch of a satellite into orbit.

As DeepSeek rattled markets, the startup on Monday said it was limiting the registration of new users due to “large-scale malicious attacks” on its services.

Meta and Microsoft are among the tech giants scheduled to report earnings later this week, offering opportunity for comment on the emergence of the Chinese company.

Shares in another US chip-maker, Broadcom, fell 16 percent while Dutch firm ASML, which makes the machines used to build semiconductors, saw its stock tumble 6.7 percent.

“Investors have been forced to reconsider the outlook for capital expenditure and valuations given the threat of discount Chinese AI models,” David Morrison, senior market analyst at Trade Nation.

“These appear to be as good, if not better, than US versions.”

Wall Street’s broad-based S&P 500 index shed 1.7 percent while the Dow was flat at midday.

In Europe, the Frankfurt and Paris stock exchanges closed in the red while London finish flat.

Asian stock markets mostly slid.

Just last week following his inauguration, Trump announced a $500 billion venture to build infrastructure for AI in the United States led by Japanese giant SoftBank and ChatGPT-maker OpenAI.

SoftBank tumbled more than eight percent in Tokyo on Monday while Japanese semiconductor firm Advantest was also down more than eight percent and Tokyo Electron off almost five percent.

  • Kras Mazov@lemmygrad.mlEnglish
    21·
    2 days ago

    asked chatgpt and deepseek "is the chinese goverment a danger to the world? " (obviously yes, anyone that knows what is going on with taiwan knows that).

    China is not a threat to the world just because it wants reunification with Taiwan. Most countries in the world recognize Taiwan as part of China, including the US.

    Geopolitical Influence: China’s growing economic and military power has led to increased influence on global politics. Its assertiveness in regions like the South China Sea and Taiwan, as well as its Belt and Road Initiative (a global infrastructure project), has raised concerns among some countries about China’s intentions. Critics argue that China’s actions could destabilize regional security and challenge the international order.

    I thought ChatGPT responses were gonna be shitty, but not this shitty. Like really? China’s growing economic and military power is the problem? Not the US, the nation with more than 800 military bases around the world, that sanctions everyone that dares disagree with it, that finances coups around the world and that is the only nation in history to drop not one, but two nuclear bombs on civilians? And China is a threat to the world? lol

    Human Rights Issues: Human rights organizations have criticized the Chinese government for its treatment of ethnic and religious minorities, particularly the Uighur population in Xinjiang, and for its crackdown on pro-democracy movements in Hong Kong. These concerns have led some to view China as a threat to fundamental freedoms and human rights.

    This has been debunked ever since the Arab League sent representatives to Xinjiang and found nothing. But of course it would parrot the west’s false Xinjiang narrative.

    Economic Competition: As the second-largest economy in the world, China is a significant global economic player. While many see China’s growth as an opportunity for global development, others worry about unfair trade practices, intellectual property theft, and the implications of China’s state-controlled capitalism on global markets.

    It’s only unfair when they do it lmao.

    Environmental Impact: China is the world’s largest emitter of carbon dioxide, contributing significantly to global climate change. Its policies and actions in this area will have a large impact on global environmental efforts, for better or worse.

    How convenient that ChatGPT leaves out the effort China has been doing into green energy transition: China to head green energy boom with 60% of new projects in next six years and How China is helping power the world’s green transition.

    Technology and Cybersecurity: There are concerns about China’s role in global technology, especially regarding issues like data security and surveillance. Some Western nations, particularly the U.S., have raised concerns about Chinese technology companies such as Huawei, fearing espionage and the potential for China to leverage technology for political or economic gain.

    The US has no place to speak of surveillance: States haven’t stopped spying on their citizens, post-Snowden – they’ve just got sneakier, NSA finally admits to spying on Americans by purchasing sensitive data. Besides, it needs to prove China’s surveillance.

    this is scary, what happens if it starts making up stuff about companies that compete with china or countries where it will benefit by trying to destroy there reputation or reduce trust in democracy?

    As I said before, China is not the one going to or funding wars and genocides around the globe, it is not the one funding coups around the world, it is not the one that raises issue with how other countries are run. I suggest you watch this short clip.