The launch of a Chinese artificial intelligence app, DeepSeek, has sent shockwaves through the US technology sector, triggering a sharp sell-off among major firms and igniting fresh concerns about the nation’s competitive edge in AI innovation.
DeepSeek, developed by a Chinese start-up founded in 2023, surged to the top of Apple’s App Store download charts just days after its release. Offering functionality similar to OpenAI’s ChatGPT, the app’s rapid rise has spurred debate within Silicon Valley and Washington over how the US can maintain its leadership in artificial intelligence.
As investor sentiment wavered, several US tech giants saw their stock prices tumble. Nvidia, the world’s leading chipmaker, plunged more than 12% at the opening bell. Microsoft declined by 3.5%, Meta Platforms fell 1.6%, and Oracle suffered a loss of over 7%. The Nasdaq Composite Index, which is heavily weighted with technology firms, dropped 3.4% in early afternoon trading.
The market turbulence underscores growing anxieties over China’s ability to compete in the AI sector. David Sacks, the AI and cryptocurrency advisor to President Donald Trump, acknowledged the significance of DeepSeek’s emergence, stating: “The AI race will be very competitive.”
The sudden rise of DeepSeek has intensified discussions over potential regulatory measures and the need for greater investment in AI research and development within the US. As the global AI race accelerates, investors and policymakers alike will be closely watching how the industry adapts to mounting international competition.
