Tech shares knocked by shock rise of Chinese AI chatbot DeepSeek
Tech shares knocked by shock rise of Chinese AI chatbot DeepSeek
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Global tech stocks are expected to be hit on Monday following the surprise emergence of a Chinese rival in the AI chatbot space. Futures trading is pointing to heavy falls in tech and AI stocks in the US when Wall Street opens on Monday. Shares in AI-related firms based in the US such as Nvidia, Microsoft and Meta are all down on Monday morning ahead of the US markets opening.
The drop has been sparked by the sudden rise of Chinese AI chatbot app DeepSeek, which has jumped to the top of the download charts on Apple’s App Store in the UK, US and China, sparking a rethink of the landscape of the AI sector. Until now, the US – home to OpenAI’s ChatGPT and Google’s Gemini, but also many other leading tech firms working on AI technology – has been seen as unmovable as the global leader in AI.
But DeepSeek’s sudden emergence, and claims of performance on par with ChatGPT despite reportedly having been developed for a fraction of the cost, is leading to a re-evaluation of the AI market. China’s access to the US-made advanced chips which are needed to power the training of AI models has been restricted since the US government bolstered restrictions on sales to China in 2021.
As a result, Chinese AI firms have begun to share their work with each other more freely and look for other ways of boosting performance – now resulting in AI models being developed which require far less computing power to run, which also means they cost substantially less than previously thought possible.
