Stocks Sink in Broad AI Rout Sparked by China's DeepSeek

Tech stocks plunged Monday after China’s DeepSeek unveiled an advanced AI model trained at a fraction of U.S. rivals’ costs, sparking a sharp reversal in the AI-driven market rally. Nvidia, the dominant supplier of AI chips, led losses with a 17% drop, erasing $589 billion in market value—its worst single-day decline on record. DeepSeek’s breakthrough underscores China’s accelerating AI cost efficiency, challenging Silicon Valley’s dominance and raising concerns about long-term profitability in the sector. The selloff extended beyond Nvidia, dragging down broader tech indices as investors reassessed AI’s economic viability amid rising global competition. Analysts warn the shift could force U.S. firms to cut costs or innovate faster, reshaping the AI industry’s competitive landscape.