This Could Be One of Tech's Worst Stock Days in Years

Monday might end up being one of the worst days for tech stocks in years, and it's all thanks to a low-cost AI startup out of China called DeepSeek, reports the Wall Street Journal. The tech-centric Nasdaq index was down more than 4% in pre-market trading, with Nvidia—which has ridden the artificial-intelligence wave to massive new heights—leading the losses. Its shares were down 14% early Monday, per CNBC. The broader indexes of the S&P 500 (2.3%) and the Dow (1%) were down as well. Bitcoin also fell more than 5%, back below $100,000.

DeepSeek's free AI assistant overtook ChatGPT for the No. 1 spot in the Apple store on Monday for the first time, reports Mashable. Essentially, the company claims to have accomplished what much bigger companies have done, only faster and for a lot less money, $6 million. Some analysts, however, are urging caution over the hype. DeepSeek's "models look fantastic but we don't think they are miracles," said analysts at Bernstein, per CNBC, adding that "the death-knell of the AI infrastructure complex as we know it" was "overblown." They were also skeptical of the $6 million price tag.

A similar sentiment comes from Masahiro Ichikawa of Sumitomo Mitsui DS Asset Management. "The idea that the most cutting-edge technologies in America, like Nvida and ChatGPT, are the most superior globally, there's concern that this perspective might start to change," he says, per Reuters. But "I think it might be a bit premature." (The Trump administration just announced a major investment in AI infrastructure with Sam Altman of OpenAI.)