Recent market turmoil in the U.S. was largely influenced by the emergence of DeepSeek, a Chinese A.I. company claiming notable advancements in AI capabilities using fewer computer chips. This development not only forced a reconsideration among investors but also challenged the U.S.'s technological leadership, particularly following recent executive actions by President Trump aimed at bolstering domestic A.I. development. Major stocks, like Nvidia, faced sharp declines, indicating widespread concern over the competitive landscape as market expectations shift regarding the potential returns from AI technologies.
Stocks sank yesterday in the U.S. as investors were shaken by the advances of the Chinese A.I. company DeepSeek, impacting major tech stocks.
DeepSeek claims to have matched the abilities of cutting-edge chatbots while using far fewer specialized computer chips, threatening U.S. tech giants' power.
Nvidia plunged more than 16 percent yesterday, erasing hundreds of billions of dollars in market value as the Nasdaq dropped about 3 percent.
Analysts were calling DeepSeek's emergence a slap in the face for investors, who may now be reassessing expectations for big returns from the A.I. race.
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