Chinese DeepSeek Causes Decline in American Stocks: CNN

The recent AI model from the Chinese startup DeepSeek has triggered a $1 trillion decline in technology stocks in the U.S. and Europe, CNN reports.

The collapse is attributed to investors questioning inflated valuations of some major American companies. "The advancements of the Chinese artificial intelligence company DeepSeek pose a threat to U.S. dominance in the tech sector," CNN states.

The free chatbot has topped the Apple app rankings, challenging more expensive competitors like OpenAI. The Chinese AI model is considered more cost-effective than its rivals while operating on less advanced chips. The company claims that only $12 million was spent on training the model, utilizing older Nvidia chips for the process.

On the day of DeepSeek's release, graphics card manufacturer Nvidia lost $520 billion in capitalization due to a 15% drop in its shares. It is worth noting that DeepSeek has been criticized for ignoring issues related to protests and human rights.