US stocks fall as investors worry about DeepSeek : NPR

This photo illustration shows the DeepSeek app on a mobile phone in Beijing on January 27, 2025. Chinese company DeepSeek’s artificial intelligence chatbot has risen to the top of the Apple Store’s download charts. (Photo by GREG BAKER / AFP) (Photo by GREG BAKER / AFP via Getty Images)

GREG BAKER/AFP via Getty Images

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GREG BAKER/AFP via Getty Images

China may be about to blow up Silicon Valley’s AI bubble – and Wall Street freaks out.

US tech stocks fell on Monday, amid a major sell-off in the market. The culprit: DeepSeek, a Chinese artificial intelligence company that last week introduced a new — and cheap — model to the red-hot AI technology market.

DeepSeek Monday morning became the most downloaded free app in Apple’s US app store — dethroning OpenAI’s ChatGPT in the process.

Shares of Nvidiathe chip company whose AI technology has made it one of the the most valuable companies in the world, fell more than 13 percent late Monday morning. Rival chip companies including Arm and Broadcom also fell, dragging down the major indexes. The tech-heavy Nasdaq was down nearly 600 points, or nearly 3 percent, by late morning.

Google, Microsoft, Apple, Meta and other big tech companies have poured billions of dollars into building their artificial intelligence capabilities, fueling an arms race in Silicon Valley. But now investors are questioning those expensive investments: DeepSeek says it costs less to train its models, and its open-source AI assistant uses less advanced chips than rivals’ models.

At the very least, investors will soon be grilling Big Tech companies about DeepSeek and their overall AI strategies. Four of the so-called Magnificent Seven tech stocks – Meta, Apple, Microsoft and Tesla – are all due to report quarterly results this week.