Massive Wall Street Losses Due to Tech Stock Decline
Wall Street’s primary indices took a significant hit on Monday, driven by the increasing popularity of a low-cost, Chinese AI model that sparked a sell-off in stocks like Nvidia and other companies expected to benefit from tech investments.
DeepSeek, a Chinese company, released a free, open-source, multilingual AI model in late December, claiming its development took just two months at a cost below $6 million, significantly less than what Western companies reported needing.
Last week, DeepSeek’s model outperformed OpenAI’s latest release in several external tests, casting doubts on the dominance of established Western AI tech giants.
The Dow Jones Industrial Average dropped by 275.4 points or 0.62% to 44,148.84. The S&P 500 fell by 132.2 points, or 2.17%, to 5,969.04. The Nasdaq Composite plummeted by 720.3 points, or 3.61%, to 19,234.042.
Nvidia’s stock fell by about 13% at market open, erasing $465 billion from its market value. However, the leading semiconductor company managed to slightly recover, with shares trading at $126.8 per share.
Tech stocks across both American and European markets also retreated, with market value losses surpassing one trillion dollars.
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