Global Tech Stocks Decline After DeepSeek AI Launch
Global tech stocks experienced a significant downturn on Monday following the unexpected launch of a new artificial intelligence model by the Chinese startup DeepSeek. The release has caused unease among investors in the AI sector.
In the United States, Nasdaq 100 futures were down 3.3%, while chip pioneer Nvidia saw a steep decline of over 13% before the market opened. Additionally, Dutch chipmaker ASML fell more than 10% during morning trading in Amsterdam.
Across Asia, tech investments also suffered, with SoftBank dropping more than 8% and Tokyo Electron decreasing by 4.9%. Japanese firms Disco Corp and Advantest, vital suppliers for Nvidia, faced declines of 1.8% and 8.6% respectively.
The decline followed the unveiling of DeepSeek's new flagship AI model, R1, which reportedly showcases advanced reasoning capabilities at a significantly lower cost than competitors like OpenAI. DeepSeek's model closely rivals OpenAI's offerings, raising concerns among stakeholders about the potential shift in leadership within the AI industry.
Since its launch, the DeepSeek application has soared to the top of the Apple App Store's Top Free Apps Chart, causing further apprehension amongst existing tech leaders.
"The AI super-race is seeing new challengers emerge, and not everyone is going to win. The companies that enjoyed first-mover advantage will now be under pressure to launch something even better or be left behind," noted Russ Mould, investment director at AJ Bell, in a morning statement.
