Wall St set to open sharply lower on news of China’s ‘DeepSeek’ AI
Wall Street was poised for a decline at the opening on Monday, triggered by the increasing popularity of an affordable Chinese artificial intelligence model called “DeepSeek.”
This led to a selloff in shares of chipmaker Nvidia and other firms expected to gain from AI technology investments. The Chinese startup DeepSeek introduced a free AI assistant, claiming it operates on less costly chips and requires less data, thereby questioning the common market assumption that AI would boost demand across the supply chain from chip manufacturers to data centers.
Reuters:
DeepSeek’s AI Assistant on Monday overtook rival ChatGPT to become the top-rated free application available on Apple’s App Store in the United States.
Investors are likely to question whether DeepSeek’s developments have the potential to really disrupt the industry, said Adam Sarhan, CEO of 50 Park Investments.
“If it is something that can, then we have a situation where all these AI stocks and the market as a whole will be re-priced.”
Nvidia, whose chips are the top choice for powering AI applications, dropped 11.4% in premarket trading, while industry peers Broadcom and Marvell Technology fell about 11% each.
Microsoft, Meta Platforms, and Google-parent Alphabet fell between 1.8% and 3.6%. AI server makers Dell Technologies and Super Micro Computer slid 5.6% and 8.1%.
MacDailyNews Take: Currently, Apple is up fractionally, +$0.12 to 222.90. Looks like being way behind in AI is paying off, temporarily, at least!
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