Nvidia Stock Down 10%; DeepSeek’s New AI Chatbot Hammers US Tech Stocks

Shares of Nvidia took a huge blow as it fell by 10.5% to $127.74 ahead of the opening bell. The introduction of a Chinese company’s new artificial intelligence chatbot caused disruption in the US tech sector by giving them a run for their money.

While Broadcom and Advanced Micro fell by 10.2% and 4.5%, Qualcomm dipped by 3%. Dutch semiconductor maker ASML was down by 11.1% in European trading.

The selloff in the equity market can be attributed to Chinese company DeepSeek’s new model R1. As per reports, R1 is at par with rivals like OpenAI’s ChatGPT in terms of performance. Moreover, it was developed at just a fraction of cost.

DeepSeek said that it had spent just $5.6 million in developing R1. Though the headline figure excludes research and development expenses, the end product very much draws a stark contrast with the US tech heavyweights wherein they splurge in tens of billions of dollars in developing AI models of their own.

DeepSeek’s foray into creation of chatbots is questioning the bull run that Nvidia has had till now. Shares of Nvidia soared by more than 900% since the end of October 2022, buoyed by skyrocketing demands for its chips amid the AI spending boom.