How the buzz around Chinese AI model DeepSeek sparked a massive Nasdaq sell-off
Published On Jan 27, 2025, 11:07 AM
The launch of Chinese AI startup DeepSeek's advanced reasoning model, R1, has led to a significant sell-off in U.S. tech stocks. Investors are questioning the high expenditures by major U.S. tech companies on AI in light of DeepSeek's perceived cost-effectiveness and competition. DeepSeek has gained attention for its capabilities, attracting commentary from industry leaders, thus impacting investor confidence and stock performance in companies like Nvidia, which saw a notable drop in share price.
Stock Forecasts
NVDA
Negative
DeepSeek's emergence poses a competitive threat to established U.S. AI companies, potentially leading to a re-evaluation of their stock valuations. Nvidia, heavily linked to AI chip supply, has already experienced a significant downturn, indicating a bearish market sentiment towards AI-related equities.
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