US tech stocks hammered on fears of cheap Chinese AI competition
US tech stocks hammered on fears of cheap Chinese AI competition
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US tech firms exposed to big artificial intelligence (AI) investments are seeing their shares take a hammering over the emergence of a low-cost Chinese competitor. The likes of Nvidia, Meta Platforms, Microsoft, and Alphabet all saw their stocks come under pressure as investors questioned whether their share prices, already widely viewed as overblown following an AI-led frenzy, were justified.
Some market analysts put the combined losses in market value, across US tech, at more than $1trn (£802bn). Money latest: Cost of European holidays surge. Leading AI chipmaker Nvidia's shares bled 11% in early Wall Street dealing alone, while the tech-focused Nasdaq slid by more than 3%.
The declines were all put down to the emergence late last week of a Chinese AI chatbot that uses lower-cost chips. Start-up DeepSeek launched a free assistant that, it said, uses less data at a fraction of the cost of incumbent players' own large language assistants.
Money blog: US tech giant shares plummet as Chinese AI chatbot tops App Store. Luxury yacht-builder Fairline collapses just weeks after sale. Hobbycraft-owner Modella circles WH Smith high street chain. Brian Jacobsen, chief economist at Annex Wealth Management, said the claims had placed in doubt the market's AI-led dominance of the past two years that have seen AI-linked stocks repeatedly hit new highs.
