Market Turmoil: Tech Shares Hit by Rising Chinese AI Influence

U.S. stocks plummeted on Monday, prompted by heightened interest in Chinese startup DeepSeek's AI model. This market frenzy has cast doubt on tech valuations, leading to significant downturns, especially in technology shares. Safe-haven currencies and U.S. bonds rose, while global equities experienced a broad sell-off.

U.S. stock markets experienced a steep downturn on Monday, driven largely by the technology sector, as the growing interest in Chinese startup DeepSeek's cost-effective AI model raised new questions about industry valuations.

Global equities saw widespread selling as investors sought safety, leading to a rise in the value of U.S. government bonds and safe-haven currencies like the yen and Swiss franc. DeepSeek, which surpassed ChatGPT to top Apple's U.S. App Store, challenges market beliefs on AI's impact on the supply chain from chipmakers to data centers.

The index performances were grim: Dow Jones down 0.27%, S&P 500 lower by 1.72%, and Nasdaq Composite dropping nearly 3%. Key players in AI chip production noted significant losses, with Nvidia shares falling over 12%, and its industry peers Broadcom and Marvell Technology both down more than 10%.

(With inputs from agencies.)