DeepSeek, a Chinese artificial intelligence (AI) company, has made a splash in the stock market with its eponymous language program for headlines, surpassing its rival ChatGPT as the top-rated free software application in Apple’s App Store in the US, according to Börse Online. The news has sent tech stocks, particularly those in the US, plummeting, with some experiencing a two-digit percentage decline.
Nvidia, a leading player in the tech industry, has lost nearly 14% of its market value, while Microsoft’s stock has dropped by about 5%. In Germany, the stock of Siemens Energy, which had been on a hot streak, has taken a nosedive, with the company’s shares plummeting by as much as 19% and trading at a low of €48.90 in Frankfurt. TSMC, the world’s largest independent semiconductor foundry, from Taiwan, saw its stock price drop by as much as 10% at one point.
According to a report by The New York Times, DeepSeek’s AI model requires significantly less computing power and, consequently, fewer high-performance chips, which are often produced by Nvidia and are crucial for the AI industry. DeepSeek needs only around 2,000 Nvidia chips for a computer, while other companies may require up to 16,000 of these chips to train their AI models. Is this the end of Nvidia’s high-flying days? The Asia Times is already speculating that China’s innovations could render the US tariffs, including those on chips and technologies, ineffective.
The cryptocurrency market, which had been heavily influenced by tech and AI trends, also took a hit, with the price of Bitcoin plummeting by as much as 6.5% to around $93,500 and Ethereum falling below the psychological mark of $3,000 and dropping by over 5% to $2,948. The volatility in the tech and cryptocurrency sectors, which many experts had predicted for 2025, has already been confirmed in January.