China’s DeepSeek for AI threatens US tech stocks

Nasdaq futures fell more than 3.5% in premarket trading on Monday on Wall Street, amid sharp losses in tech stocks. Dow Jones futures also fell more than 400 points.

The losses coincided with a decline in tech stocks due to the hype surrounding a new Chinese AI model developed by DeepSeek.

Shares of US chipmaker Nvidia fell about 10% in premarket trading on Wall Street.

DeepSeek is an AI model developed by a Chinese startup of the same name, founded in 2023 by Liang Wenfeng, head of AI-driven quantitative hedge fund High-Flyer.

DeepSeek stands out from other AI-based chatbots, such as OpenAI’s ChatGPT, in that it expresses its logic before responding to requests. The company says the R1 version of the model performs on par with the latest versions from OpenAI and has licensed the technology to people interested in developing chatbots. DeepSeek R1 approaches or outperforms competing models on several leading benchmarks that measure AI capabilities, such as AIME 2024 for computational tasks, MMLU for general knowledge, and AlpacaEval 2.0 for question-and-answer performance.