Chinese app DeepSeek hammers US tech stocks with cheaper open-source AI model [Video]

U.S. tech shares tumbled on Monday after the popularity of Chinese AI startup DeepSeek raised concerns among investors over American dominance in the sector.

The tech-heavy Nasdaq Composite plunged more than 2.6% in early trading. The Dow Jones Industrial Average was down more than 100 points and the S&P 500 was down more than 1.5%. 

DeepSeek is gaining attention in Silicon Valley as the company appears to be nearly matching the capability of chatbots like OpenAI’s ChatGPT, but at a fraction of the development cost.

Nvidia shares were hit the hardest, falling more than 11%, and led other tech companies lower. Arm Holdings and Advanced Micro Devices were lower by 8% and 5.5%, respectively. Microsoft shares slid 3.5%.

DeepSeek has surgedin popularity in global app stores since the app was released earlier this month, having been downloaded1.6 million times by Jan. 25 in the U.S. and ranking No. 1 in iPhone app …