A young Chinese AI startup, DeepSeek, sparked a massive rout in U.S. technology stocks Monday as its highly competitive — and potentially shockingly cost-effective — models stoked doubts about the hundreds of billions of dollars that America’s biggest tech companies are spending on artificial intelligence.
DeepSeek’s emergence is shaking up investor confidence in the AI story that has been lifting the U.S. bull market the past two years. It calls into question the hype around Nvidia’s chips and rippled all the way through the market to hit shares of power producers who were set to get a boost from AI data center demand.
Here’s how the DeepSeek-triggered market sell-off on Wall Street unfolded:
New reasoning model
DeepSeek was founded in May 2023 by Liang Wenfeng, who partly funded the company by his AI-powered hedge fund. In late December, the AI developer launched a free, open-source large language model that it said took only…
