Stunning AI advances from Chinese startup DeepSeek have sent tech stocks tumbling across the US and Europe.
DeepSeek released a free chatbot and new open-source AI models last week. Within days, the chatbot had overtaken ChatGPT to reach the top spot on the Apple App Store’s free app rankings.
The new R1 models sent further shockwaves through the AI world. R1 promised performance to rival OpenAI top’s reasoning model — at just a fraction of the cost. Marc Andreessen, one of the world’s most powerful VCs, called the release “AI’s Sputnik moment.”
The markets were also astounded. Shaken by the threat of a powerful, low-cost AI challenger from China, shares in US tech titans plummeted on Monday. Chip designer Nvidia set an alarming example. The chip designer suffered the largest rout in stock market history.
European semiconductor firms were also hit hard. Shares in Dutch chip leader ASML — the continent’s most valuable public tech company — slumped by as much as 12%.
Semiconductor firms Besi and Asm International also endured double-digit drops. Yet chip companies were not the only European businesses to feel a painful impacts.
The continent’s power equipment makers were also clobbered. Stocks plummeted particularly sharply at Germany’s Siemens Energy and France’s Schneider Electric.
Amid the market torment, DeepSeek has also sparked excitement. By offering powerful yet affordable open-source models, the startup could accelerate the spread of AI’s benefits across the world. For the sector’s established leaders, however, the landscape has been shaken.