DeepSeek AI: The New Challenger Disrupting Global Technology Markets

The launch of a cost-effective AI assistant by Chinese startup DeepSeek has led to a significant drop in global tech shares, with prominent companies like Nvidia and Broadcom experiencing substantial losses. The innovation has sparked worldwide interest, highlighting increased competition in the AI field.

A global upheaval in technology shares was triggered on Tuesday as investors grappled with the introduction of a budget-friendly AI model by Chinese startup DeepSeek. Concerns arose over lofty valuations and AI giants' market dominance amid the ongoing market disruption.

Nvidia, an emblematic figure of the AI surge, experienced a dramatic decline, shedding 17% of its market value on Monday and incurring a staggering $593 billion loss, marking a historic one-day loss. The catalyst was DeepSeek's innovative free AI assistant, utilizing less data and costing considerably less than current leading services, which gained international attention, including praise from OpenAI CEO Sam Altman as an 'impressive model'.

Global tech stocks have taken a hit, affecting markets from Tokyo to Amsterdam and Silicon Valley. Japanese companies like Advantest and Tokyo Electron recorded notable declines, while U.S. firms including Broadcom, Microsoft, and Alphabet also suffered losses. The event underscores the risks of inflated valuations and crowded investor positions in the tech sector.

(With inputs from agencies.)