Nvidia falls 14% in premarket trading as China’s DeepSeek triggers tech sell-off
Nvidia's stock fell 16% after Chinese startup DeepSeek launched a competitive AI model at low cost, raising concerns about U.S. tech firms' competitiveness and prompting broader market sell-offs.
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Nvidia's stock fell by 16% following the launch of a new AI model by Chinese startup DeepSeek, which raised concerns about the competitiveness of U.S. technology firms in the artificial intelligence sector. DeepSeek introduced a free, open-source large language model in December, claiming it was developed in just two months at a cost of under $6 million, significantly less than the investments made by Western companies. This development has prompted questions regarding the substantial financial commitments made by major tech firms in AI and data centers. Nvidia's decline was part of a broader sell-off affecting other tech stocks, including Micron and Arm Holdings, which also experienced significant losses. Analysts noted that while DeepSeek's model appears competitive, U.S. companies still have advantages in access to advanced computing resources, particularly graphics processing units (GPUs). Despite skepticism about the actual development costs of DeepSeek's model, the situation has intensified discussions about the future of AI infrastructure and the potential challenges facing U.S. dominance in the field.
- Nvidia's stock dropped 16% due to concerns over U.S. competitiveness in AI.
- Chinese startup DeepSeek launched a competitive AI model at a fraction of the cost of U.S. counterparts.
- The sell-off affected multiple tech stocks, indicating broader market concerns.
- Analysts believe U.S. firms still hold advantages in advanced computing resources.
- Skepticism exists regarding the true development costs of DeepSeek's AI model.
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