US stock futures sink as investors weigh China challenge to US dominance in AI. Nvidia drops 12%
Investors dumped technology stocks in premarket trading Monday, sending U.S. indexes sharply lower after Chinese artificial intelligence startup DeepSeek demonstrated a chatbot that it says rivals the top versions from OpenAI and Google for a fraction ...
Investors dumped technology stocks in premarket trading Monday, sending U.S. indexes sharply lower after Chinese artificial intelligence startup DeepSeek demonstrated a chatbot that it says rivals the top versions from OpenAI and Google for a fraction of the cost.
Futures for the S&P 500 sank 2.3% before the bell, while futures for the technology-heavy Nasdaq tumbled 3.9%. Futures for the Dow Jones Industrial Average declined 0.8%.
The same tech companies that have benefitted from the AI frenzy in the past year were getting pummeled before markets even officially opened on Monday.
Chipmakers Nvidia and Broadcom both lost around 12%, while software giant Oracle lost 8%. Microsoft slid more than 6% and Amazon was down 4.5%. Google parent company Alphabet and Facebook parent Meta each lost about 3.5%.
Analyst Dan Ives of Wedbush Securities said that while the DeepSeek AI technology is impressive, the U.S. tech sector is still far ahead of China with regard to AI infrastructure.
“Launching a competitive (large language) model for consumer use cases is one thing,” Ives wrote in a note to clients. “Launching broader AI infrastructure is a whole other ballgame and nothing with DeepSeek makes us believe anything different.”
In early European trading, Germany's DAX dropped 1.1% to 21,178.37, while the CAC 40 in Paris shed 0.8% to 7,863.70. Britain's FTSE 100 declined 0.3% to 8,473.33.
In Asia, Hong Kong's Hang Seng gained 0.7% to 20,197.77, with shares in e-commerce giant
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