The Vanguard Total Stock Market Index Fund ETF (VTI) opened down over 2%, primarily fueled by significant selloffs in tech stocks driven by concerns over DeepSeek, a Chinese AI competitor. This company claims to provide AI solutions at a much lower cost than existing leaders like OpenAI. With VTI holding a substantial portion of its assets in tech, particularly Nvidia, the market vulnerability has been exposed as investors reconsider AI marketing budgets and the potential loss of pricing power of leading tech firms. The market's reaction could foreshadow larger corrections if trends continue.
"DeepSeek has singlehandedly brought these markets to their knees. China's AI solution is competitive with OpenAI, and the company claims that it operates at a fraction of the cost."
"If tech companies can get the same AI output at a fraction of the cost, it would put serious pricing and margin pressure on AI leaders like Nvidia and Broadcom."
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