The stunning AI advances of Chinese startup DeepSeek sent tech stocks in the US and Europe tumbling.
DeepSeek released last week a free chatbot as well as new open-source AI model. In just a few days, the chatbot surpassed ChatGPT and reached the top of the Apple App Store rankings for free apps.
New R1 models sent shockwaves throughout the AI world. R1 promised performance that rivaled OpenAI top reasoning model – at a fraction the cost. Marc Andreessen, a powerful VC, called the release of R1 “AI’s Sputnik Moment.”
Markets were also stunned. Shares of US tech giants plunged on Monday, shook by the threat posed by a powerful and low-cost AI competitor from China. Nvidia’s example was alarming. The chip designer suffered a massive rout. Stock market history
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European semiconductor firms were also hit hard. Shares in Dutch chip leader ASML — the continent’s second most valuable public tech company — slumped by as much as 12%.
Semiconductor firms Besi and Asm International also endured double-digit drops. Chip companies were not the sole European business to suffer a negative impact.
Power equipment manufacturers on the continent were also hit hard. Siemens Energy in Germany and Schneider Electric in France saw their stocks plummet.
Despite the turmoil in the market, DeepSeek is also generating excitement. The startup could accelerate AI’s spread around the world by offering powerful, yet affordable open-source software models. The landscape has changed for the established leaders in the sector.
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