Nikkei falls about 1% as tech shares slide

The Nikkei fell about 1% on Monday, dragged down by a slide in technology stocks after a rally last week, as investors weighed the impact of a Chinese artificial intelligence startup on U.S. dominance of the sector.

The Nikkei fell 0.9% to 39,565.80 points at the close after rising in early trade, while the broader Topix index rose 0.3% to 2,758.07.

Tech heavyweights suffered heavy losses, erasing gains made last week on news of U.S. plans to invest in funding artificial intelligence infrastructure, according to Reuters.

Investors are also watching Chinese artificial intelligence company DeepSec after it launched an open-source model called DeepSec-R1 that is said to rival OpenAI’s O1 model in several performance indicators.