Chinese artificial intelligence startup DeepSeek’s latest AI model sparked a $1 trillion rout in US and European technology stocks, as investors questioned bloated valuations for some of America’s biggest companies.
DeepSeek’s latest AI model rose to the top of the Apple’s appstore charts over the weekend, presenting a visible challenge to costlier models like OpenAI and raising questions over the hundreds of billions in planned spending on the technology by the likes of Microsoft Corp., Meta Technologies Inc. and Alphabet Inc.
It also put a spotlight AI chip producer Nvidia Corp., whose shares soared ninefold in the past two years, making it the highest-valued company in the world. The Santa Clara, California-based firm slid more 10% in premarket trading Monday — a drop that would zap about $340 billion in market value if it were to hold in the cash session.
Nasdaq 100 futures tumbled as much as 5.2% in overnight trading before paring the loss to 3.9% as of 7:30 a.m. in New York. That marked the biggest intraday drop for the contracts since August. In Europe, tech stocks led market losses, with shares of chip equipment maker ASML Holding NV down as much as 12%. The Cboe Volatility Index, known as the VIX, surged to 21.5. The Nasdaq 100 and Europe’s Stoxx 600 technology sub-index were together set for a market capitalization wipeout of $1.2 trillion, if the losses hold.
Bloomberg Intelligence senior analyst Mandeep Singh provides analysis on Bloomberg Surveillance Radio.

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Nvidia’s stock plummeted 18% due to investor concerns about Chinese AI startup DeepSeek, erasing a record $560 billion from its market capitalization.
The decline had a ripple effect on the market, causing the S&P 500 to fall as much as 2.3% and the Nasdaq 100 to tumble as much as 3.6%.
DeepSeek’s low-cost AI model has sparked concerns that US companies have overspent on AI development, and that the Chinese firm’s approach could disrupt the current AI business model. Gregory Allen, Director of the Wadhwani AI Center at the Center for Strategic and International Studies joins Balance of Power to discuss.\r.
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