Tech Stocks Tumble Amidst DeepSeek's Disruption in AI Valuation

U.S. tech stocks plummeted as DeepSeek's low-cost AI model questioned the sector's valuations. Safe-haven assets surged amidst the volatility, with Nasdaq 100 futures falling 3.5%. DeepSeek's rise poses a significant challenge to existing AI market narratives, pressuring global equities and prompting widespread risk-aversion.

On Monday, U.S. technology stocks faced a sharp decline, driven by growing interest in Chinese startup DeepSeek's economical artificial intelligence model. This development has cast doubt on the tech sector's lofty valuations, causing considerable market volatility.

The global equities drop led investors toward safer assets, with increased demand for U.S. government bonds and safe-haven currencies like the yen and Swiss franc. DeepSeek's use of affordable chips and data challenges the prevailing market expectations for AI-driven demand, impacting stakeholders across the supply chain.

Tech indices experienced significant setbacks, with Nasdaq 100 and S&P 500 futures decreasing sharply. As major tech players like Nvidia witnessed valuation dips, broader risk-off sentiment permeated through various asset classes, including currencies, commodities, and bonds.

(With inputs from agencies.)