China’s AI DeepSeek causes  massive losses in global financial stocks

 

Chinese startup DeepSeek launched a free AI which is a free AI assistant few days ago. According to the startup, deepseek uses less data and cost very little compared to the cost of the major players in the AI market. As at Monday, the nube rof downloads of DeepSeek from Apple had overtaken that of the U.S. rival ChatGPT.

 

 

For years, investors have been buying AI stocks, worried they’d miss out on the next big thing. Companies like Nvidia have seen their stock prices skyrocket because everyone believed profits would come eventually. But now, there’s a tough truth setting in: the US might not lead AI for much longer.

 

Big Losses in AI Stocks

 

AI stocks are dropping fast due to DeepSeek entrance into the market: The Nasdaq 100 is down 4.6% before markets opened.

The Stoxx 600 has dropped 5.8%, wiping out over $1 trillion in market value. Nvidia’s stock has fallen 12% in pre-market trading, losing over $400 billion in value — the biggest single-day loss for any company in the S&P 500. This loss is more than double the previous one-day record, which Nvidia itself set last September.

The next-biggest loser on the Nasdaq was chipmaker Broadcom Inc (AVGO.O), which dropped over 18%, followed by Microsoft (MSFT.O), the company backing ChatGPT, down 2.3%. Google’s parent company Alphabet (GOOGL.O) also fell 3.4%.

These major losses highlight how China’s DeepSeek AI is challenging the dominance of US tech giants, causing a shakeup across financial stocks and AI investments.

 

 

What Went Wrong?

 

The US worked hard to stop China from building its own AI technology. It even blocked ASML from selling advanced chip-making machines to China. But those efforts haven’t worked.

China’s DeepSeek recently launched a new AI model that’s said to match OpenAI’s latest version. Some even say it’s better at math and logic. DeepSeek is also far cheaper to run and has made its code open-source, meaning anyone can use it for research or business. This has investors worried about competition. Meanwhile, the Trump administration announced a $500 billion AI project called The Stargate Project to boost the US’s AI leadership. Major players like Oracle, Softbank, Nvidia, and MGX are involved. But despite the huge funding, China has shown it can build strong AI tools with far less money.

 

What Happens Next?

 

China’s success with DeepSeek is a huge problem for US companies that rely on expensive AI systems. Businesses like Nvidia, which sell high-cost chips and run costly server farms, could lose customers as cheaper AI becomes available.

The US can no longer assume it will always dominate the AI market. China’s affordable AI tools could pressure Nasdaq stocks and even hurt European markets.

 

Big Questions for AI Companies 

 

Investors now wonder: How can companies explain spending billions on AI research when China’s AI costs so much less?

How will companies make money from AI if cheaper options work just as well?

Some worry this could be the start of an AI bubble bursting, where stocks that seemed unstoppable lose their value fast.

 

What to Watch This Week

 

Major tech companies like Microsoft, Meta, Tesla, and Apple will report earnings this week. Investors are waiting to hear how these companies explain their AI strategies. The idea that AI needs massive computing power and expensive technology is now under question. If DeepSeek can achieve strong performance on a budget, could others do the same?

 

What It Means for the Future

 

Until companies show clear plans for making money from AI, stock prices may keep falling. The AI race is no longer just about the US and OpenAI—it’s now a global competition, with China proving to be a serious contender.

China’s AI DeepSeek causes  massive losses in global financial stocks

 

Chinese startup DeepSeek launched a free AI which is a free AI assistant few days ago. According to the startup, deepseek uses less data and cost very little compared to the cost of the major players in the AI market. As at Monday, the nube rof downloads of DeepSeek from Apple had overtaken that of the U.S. rival ChatGPT.

 

 

For years, investors have been buying AI stocks, worried they’d miss out on the next big thing. Companies like Nvidia have seen their stock prices skyrocket because everyone believed profits would come eventually. But now, there’s a tough truth setting in: the US might not lead AI for much longer.

 

Big Losses in AI Stocks

 

AI stocks are dropping fast due to DeepSeek entrance into the market: The Nasdaq 100 is down 4.6% before markets opened.

The Stoxx 600 has dropped 5.8%, wiping out over $1 trillion in market value. Nvidia’s stock has fallen 12% in pre-market trading, losing over $400 billion in value — the biggest single-day loss for any company in the S&P 500. This loss is more than double the previous one-day record, which Nvidia itself set last September.

The next-biggest loser on the Nasdaq was chipmaker Broadcom Inc (AVGO.O), which dropped over 18%, followed by Microsoft (MSFT.O), the company backing ChatGPT, down 2.3%. Google’s parent company Alphabet (GOOGL.O) also fell 3.4%.

These major losses highlight how China’s DeepSeek AI is challenging the dominance of US tech giants, causing a shakeup across financial stocks and AI investments.

 

 

What Went Wrong?

 

The US worked hard to stop China from building its own AI technology. It even blocked ASML from selling advanced chip-making machines to China. But those efforts haven’t worked.

China’s DeepSeek recently launched a new AI model that’s said to match OpenAI’s latest version. Some even say it’s better at math and logic. DeepSeek is also far cheaper to run and has made its code open-source, meaning anyone can use it for research or business. This has investors worried about competition. Meanwhile, the Trump administration announced a $500 billion AI project called The Stargate Project to boost the US’s AI leadership. Major players like Oracle, Softbank, Nvidia, and MGX are involved. But despite the huge funding, China has shown it can build strong AI tools with far less money.

 

What Happens Next?

 

China’s success with DeepSeek is a huge problem for US companies that rely on expensive AI systems. Businesses like Nvidia, which sell high-cost chips and run costly server farms, could lose customers as cheaper AI becomes available.

The US can no longer assume it will always dominate the AI market. China’s affordable AI tools could pressure Nasdaq stocks and even hurt European markets.

 

Big Questions for AI Companies 

 

Investors now wonder: How can companies explain spending billions on AI research when China’s AI costs so much less?

How will companies make money from AI if cheaper options work just as well?

Some worry this could be the start of an AI bubble bursting, where stocks that seemed unstoppable lose their value fast.

 

What to Watch This Week

 

Major tech companies like Microsoft, Meta, Tesla, and Apple will report earnings this week. Investors are waiting to hear how these companies explain their AI strategies. The idea that AI needs massive computing power and expensive technology is now under question. If DeepSeek can achieve strong performance on a budget, could others do the same?

 

What It Means for the Future

 

Until companies show clear plans for making money from AI, stock prices may keep falling. The AI race is no longer just about the US and OpenAI—it’s now a global competition, with China proving to be a serious contender.

China’s AI DeepSeek causes  massive losses in global financial stocks

 

Chinese startup DeepSeek launched a free AI which is a free AI assistant few days ago. According to the startup, deepseek uses less data and cost very little compared to the cost of the major players in the AI market. As at Monday, the nube rof downloads of DeepSeek from Apple had overtaken that of the U.S. rival ChatGPT.

 

 

For years, investors have been buying AI stocks, worried they’d miss out on the next big thing. Companies like Nvidia have seen their stock prices skyrocket because everyone believed profits would come eventually. But now, there’s a tough truth setting in: the US might not lead AI for much longer.

 

Big Losses in AI Stocks

 

AI stocks are dropping fast due to DeepSeek entrance into the market: The Nasdaq 100 is down 4.6% before markets opened.

The Stoxx 600 has dropped 5.8%, wiping out over $1 trillion in market value. Nvidia’s stock has fallen 12% in pre-market trading, losing over $400 billion in value — the biggest single-day loss for any company in the S&P 500. This loss is more than double the previous one-day record, which Nvidia itself set last September.

The next-biggest loser on the Nasdaq was chipmaker Broadcom Inc (AVGO.O), which dropped over 18%, followed by Microsoft (MSFT.O), the company backing ChatGPT, down 2.3%. Google’s parent company Alphabet (GOOGL.O) also fell 3.4%.

These major losses highlight how China’s DeepSeek AI is challenging the dominance of US tech giants, causing a shakeup across financial stocks and AI investments.

 

 

What Went Wrong?

 

The US worked hard to stop China from building its own AI technology. It even blocked ASML from selling advanced chip-making machines to China. But those efforts haven’t worked.

China’s DeepSeek recently launched a new AI model that’s said to match OpenAI’s latest version. Some even say it’s better at math and logic. DeepSeek is also far cheaper to run and has made its code open-source, meaning anyone can use it for research or business. This has investors worried about competition. Meanwhile, the Trump administration announced a $500 billion AI project called The Stargate Project to boost the US’s AI leadership. Major players like Oracle, Softbank, Nvidia, and MGX are involved. But despite the huge funding, China has shown it can build strong AI tools with far less money.

 

What Happens Next?

 

China’s success with DeepSeek is a huge problem for US companies that rely on expensive AI systems. Businesses like Nvidia, which sell high-cost chips and run costly server farms, could lose customers as cheaper AI becomes available.

The US can no longer assume it will always dominate the AI market. China’s affordable AI tools could pressure Nasdaq stocks and even hurt European markets.

 

Big Questions for AI Companies 

 

Investors now wonder: How can companies explain spending billions on AI research when China’s AI costs so much less?

How will companies make money from AI if cheaper options work just as well?

Some worry this could be the start of an AI bubble bursting, where stocks that seemed unstoppable lose their value fast.

 

What to Watch This Week

 

Major tech companies like Microsoft, Meta, Tesla, and Apple will report earnings this week. Investors are waiting to hear how these companies explain their AI strategies. The idea that AI needs massive computing power and expensive technology is now under question. If DeepSeek can achieve strong performance on a budget, could others do the same?

 

What It Means for the Future

 

Until companies show clear plans for making money from AI, stock prices may keep falling. The AI race is no longer just about the US and OpenAI—it’s now a global competition, with China proving to be a serious contender.