Tech Tumble: US AI Stocks Shake as Chinese AI Emerges

The rise of Chinese AI startup DeepSeek led to a selloff in US tech stocks, impacting major chipmakers like Nvidia. While not an immediate threat to US firms, it challenges expectations for AI-driven growth. Several tech stocks including Microsoft and Meta fell as markets braced for further volatility.

The technology sector experienced significant turbulence on Monday as futures linked to the Nasdaq fell sharply. This came in the wake of a surge in popularity for a low-cost artificial intelligence model from the Chinese company, DeepSeek, sparking a selloff in major US chipmakers including Nvidia.

DeepSeek's introduction of a free AI assistant has raised questions about the future demand for AI supply chains, traditionally reliant on high-cost infrastructure. Market head Richard Hunter noted that while DeepSeek isn't an immediate existential threat to US-based solutions, it has caused substantial unease among investors.

Major tech companies, from Nvidia to Microsoft, saw stock declines ahead of earnings reports, while AT&T gained due to exceeding subscriber growth expectations. The wider global market remains cautious amidst geopolitical tensions and anticipated economic decisions, including potential US interest rate steadying.

(With inputs from agencies.)