Silicon Valley trembles with DeepSeek
DeepSeek, which overtook the rival AI platform ChatGPT to become the top-rated free application on Apple’s App Store in the United States, says it uses lower-cost chips and less data, challenging a widespread bet in markets that AI will drive demand along a supply chain from chipmakers to data centres. DeepSeek’s quick dominance raised questions over Microsoft., Meta Platforms, and Alphabet’s hundreds of billions in planned spending on AI. The recently launched AI model is now seen as a strong rival to those from OpenAI and Meta Platforms Inc., as it is more cost-effective and operates on less powerful chips.
The DeepSeek-V3 model was developed with an investment of $5.6 million, a fraction of the amounts the US tech giants spent. The open-source technology product has quickly risen to the top of Apple Inc.’s App Store rankings.
US Stock Market News Highlights: Wall Street ends mixed; Nasdaq posts biggest one-day percentage drop since Dec 18
Highlights of the US Stock Market News: Monday saw a mixed finish to the US stock market, with the S&P 500 recording its largest one-day percentage decline since January 10 and the Nasdaq recording its largest one-day percentage decline since December 18.
The Wall Street meltdown follows a sharp decline in US chipmakers’ stock due to DeepSeek’s AI Assistant, a low-cost Chinese artificial intelligence model.
The Dow Jones Industrial Average rose 289.33 points, or 0.65%, to 44,713.58, while the S&P 500 dropped 88.96 points, or 1.46%, to 6,012.28. The Nasdaq Composite dropped 612.47 points, or 3.07%, to close the day at 19,341.83.
According to LSEG data, Nvidia’s stock price fell 17%, wiping away over $593 billion in market value. This was the largest one-day loss for a Wall Street business in history. Alphabet’s stock price fell 4.2%, Microsoft’s stock fell 2.1%, and Dell Technologies’ stock fell 8.7%. Vistra’s stock fell 28.3%, while Apple’s stock increased 3.18%.
The US dollar falls to its lowest level since December 18 in real-time stock market news.
US Stock Market News LIVE: US Treasury yields tumbled to multi-week lows, tracking steep declines in equities, as investors sought the safety of government bonds. The benchmark US 10-year yield dropped 8.5 basis points to 4.538 per cent. That pushed the dollar lower, with safe-haven currencies as the main beneficiaries. The dollar index, which measures the US currency against six peers, fell 0.3 per cent, around its lowest level since December 18.
US Stock Market News LIVE: AI-themed ETFs plunge in wake of DeepSeek news
LIVE US Stock Market News: The announcement that a Chinese business had introduced a potent new artificial intelligence model caused the prices of exchange-traded funds with excessive exposure to Nvidia to plummet in the first few hours of trading on Monday.
Venture capitalist Marc Andreessen and other technology industry insiders have called the launch of DeepSeek’s model, which has been around for a year, a “Sputnik moment” for American AI companies. The news that DeepSeek’s downloads have already surpassed those of US rival ChatGPT on Apple’s online app store caused the share prices of most of these companies to plummet..
The four ETFs that offer daily returns of double the gain in Nvidia were hit with the biggest decline, with the GraniteShares 2x Long NVDA Daily ETF nosediving 32.5 per cent. Its leveraged inverse counterpart, which offers investors a gain of double any losses in Nvidia’s stock, soared 31 per cen.
