Nvidia, Nasdaq futures plunge as DeepSeek triggers tech stock selloff
Nvidia Corp. and ASML Holding NV shares plunged early Monday as Chinese artificial intelligence startup DeepSeek appeared to provide comparable performance to Western chatbots at a fraction of the price.
Nvidia shares fell about 9 per cent in premarket trading, while ASML’s shares dropped as much as 11 per cent to €626.20 apiece in Amsterdam trading, the biggest intraday drop since Oct. 15. The technology heavy Nasdaq 100 futures index shed 3 per cent.
The latest AI model of DeepSeek, released last week, is widely seen as competitive with those of OpenAI and Meta Platforms Inc. The open-sourced product was founded by quant fund chief Liang Wenfeng and is now at the top of Apple Inc.’s App Store rankings.
“Concerns have immediately emerged that it could be a disruptor to the current AI business model, which relies on high end chips and extensive computing power and hence energy,” Jefferies analysts said in a note to clients.
Nvidia designs semiconductors used in AI and ASML makes machines needed to produce high-end chips. Both companies have benefited from a surge in AI spending. Meta announced plans on Friday to boost capital expenditures on AI projects this year by about half to as much as US$65 billion. That came on the heels of OpenAI, SoftBank Group Corp. and Oracle Corp. announcing a US$100 billion joint venture called Stargate to build out data centers and AI infrastructure projects around the US.
In a bid to stall China’s progress in AI, the U.S. has banned the export of advanced semiconductor technologies to the Asian nation and is limiting sales of advanced Nvidia AI chips to many countries, including allies. ASML has never been able to sell its most-advanced extreme ultraviolet lithography machines to China
Read more on financialpost.com
