DeepSeek reduced the stock values of American companies by $1 trillion in one day — Bloomberg

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Фото: FUTURE PUBLISHING VIA GETTY IMAGES
Фото: FUTURE PUBLISHING VIA GETTY IMAGES

The Chinese startup DeepSeek R1 artificial intelligence (AI) model caused a stir in global technology stocks on Monday, raising questions about the United States technological dominance. Bloomberg reported this, according to the national portal Adyrna.

The AI led to a decline in the stock of Nvidia, a producer of computing hardware. During the first trading hours on the NASDAQ exchange, its stock dropped by 13%, reaching $123. Nasdaq 100 futures fell by 3.4%, and S&P 500 futures dropped by 2%. In Europe, technology stocks contributed to the market decline, with chipmaker ASML Holding NV shares falling by 11%. The Cboe Volatility Index (VIX) rose significantly. If the losses persist, the Nasdaq 100 and Europe Stoxx 600 Technology Index could decrease by around $1 trillion in market capitalization.

DeepSeek models show that powerful AI models can be developed with fewer losses. This could disrupt the plans for investing in the entire AI supply chain, as the industry is based on significant costs from just a few large hyperscale companies, said Wei-Sern Ling, Managing Director at Union Bancaire PrivГ©e.

According to Bloomberg, by 4:45 AM New York time, more than 200,000 Nasdaq 100 futures contracts were traded, four times the average of the last 30 days.

DeepSeek AI model, founded by quantum fund leader Liang Wenfeng, is seen as a competitor to the latest products from OpenAI and Meta Platforms Inc. Investor Marc Andreessen praised it as one of the most remarkable and impressive achievements. DeepSeek app shows both its work and reasoning when responding to user queries. Released last week, the app is currently ranked first in the App Store, with users praising its transparency.

AI trading has also plunged elsewhere, with investors revising their forecasts on computing power and energy consumption. Siemens Energy AG, one of the AI sector winners in Europe, saw its stock fall by 20%.

The American stock market, along with companies tied to artificial intelligence, is also in decline. The S&P 500 index, which closed above 6,100 points on January 24, dropped below 6,000 points on Monday.

Wei-Sern Ling, Managing Director at Union Bancaire Privée, noted that DeepSeek’s development will lower the investment appeal of all companies related to the AI industry.

Meanwhile, former U.S. President Donald Trump announced the Stargate project, aiming to strengthen the U.S.s leadership in artificial intelligence. Participants plan to invest $500 billion in the development but without using government funding. However, Trump main partner, billionaire Elon Musk, mocked the initiative, pointing out that companies do not have such funding.

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