The emergence of low-cost AI chatbot DeepSeek has caused shockwaves on Wall Street, with Nvidia losing more than $500bn in market value.
It is understood that the DeepSeek app, which was launched last week, has overtaken rivals including ChatGPT to become the most downloaded free app in the US.
A report by the BBC says shares in other major US technology firms have fallen steeply in value since markets opened on Monday.
The report adds that shortly after US markets opened, DeepSeek says it was hit with a “large-scale malicious attack.”
DeepSeek was reportedly developed for a fraction of the cost of its rivals, raising questions about the future of America’s AI dominance and the scale of investments US firms are planning.
“This is a pretty big flex for China. They’re having a big negative impact on the US markets. It’s a black eye for US tech,” the BBC quotes Deepwater Management analyst Gene Munster as saying.
Munster says there are many questions left unanswered about DeepSeek, including how the model got so good as cheaply and quickly as it did.
“This is impressive, but I feel like we’re only getting two-thirds of the story,” says Munster.
