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Chinese artificial intelligence startup DeepSeek rocked global technology stocks Monday, raising questions over America’s technological dominance.
Buzz grew over the weekend about DeepSeek’s latest AI model being cost-effective while running on less-advanced chips, casting doubt on the validity of the rich valuations for companies like Nvidia Corp., which has led the global AI stock boom as its chips have been seen as essential to the technology.
Shares of [Nvidia] slid 10% in premarket trading on Monday.
Nasdaq 100 futures tumbled 3.4%, while contracts on the S&P 500 fell 2% as of 5 a.m. in New York.
In Europe, tech stocks led market losses, with shares of chip equipment maker ASML Holding NV down 11%.
The Cboe Volatility Index, known as the VIX, spiked higher. The Nasdaq 100 and Europe’s Stoxx 600 technology sub-index were together set for a market capitalization wipeout of roughly $1 trillion, if the losses hold.
Roughly 200,000 Nasdaq 100 futures contracts changed hands by 4:45 a.m. New York time, about four times more than the 30-day average for this time of day, according to data compiled by Bloomberg.
AI trades slumped elsewhere as investors rethought assumptions on computing power and energy. Siemens Energy AG, one of the few AI winners in Europe, slid 20%.
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