The stock prices of several US technology companies plummeted on Monday, with a Chinese start-up being the catalyst for the electronic market’s decline on the Nasdaq. The KI company, which had recently released its ChatGPT-like model in the App Store, had already become one of the most popular free apps by the time the market opened.
According to Bloomberg, DeepSeek’s listing on Monday caused the Nasdaq index to drop by 3 percent, resulting in a loss of around $1 billion for the noted technology-driven companies. For instance, the stock of KI chip producer Nvidia fell by 17 percent, reaching its lowest point since March 2020. Leading tech companies like Microsoft, Meta and Alphabet were also affected, with losses of 3.8 percent, 0.8 percent and 3.4 percent, respectively.
The commotion is attributed to the new KI model used by DeepSeek. According to media reports, the Chinese app functions similarly to ChatGPT but is considered superior by some test reviewers. Moreover, the Chinese KI program is reportedly cheaper to operate and can run on less sophisticated KI chips.
In an interview with CNN, Kaith Lerner, an analyst at Truist, stated that the popularity of DeepSeek has put the leadership of established US KI companies in question. On the other hand, Charu Chanana, the chief strategist at Saxo, predicted that the rise of the Chinese start-up could spark interest in undervalued Chinese KI firms.
Following this market turbulence, DeepSeek announced “massive malicious attacks” on its servers, prompting the company to temporarily restrict new sign-ups. Its website was temporarily unavailable, but registered users could still access the app without interruption.