US technology companies fell in pre-market trade, as Chinese startup Deepseek raised concerns about competitiveness in AI and America's leadership in the sector, triggering a global sell-off.
Chip designer stocks NvidiaA A big beneficiary of the artificial intelligence hypefell 9.84% at 5:11 a.m. ET before the market open. Chip companies in the Netherlands ASML and ASM International fell 10.59% and 14.94% respectively in European trade, while in Asia, Japanese chip-related stocks were broadly lower.
Deepseek launched a free, highly sourced version of the language in late December, claiming to have been developed in Only two months At a cost of less than $6 million – a much smaller outlay than those called for by its Western counterparts. Last week, the company released a logic model as well It reportedly outperformed Openai lasts in several third party tests.
The developments have raised questions about the amount of money big tech companies are investing in AI models and data centers.
“It's clear that DeepSEC doesn't have access to as much computation as HyperAmlar and they've somehow managed to develop a model that looks very competitive,” Srini Bagori, a semiconductor analyst at Raymond James, said in a note on Monday.
– CNBC's Li Ying Shan and Michael Bloom contributed to this story.
This breaking news story is being updated.
