China's DeepSeek buzz puts tech stocks on track for $1 trillion wipeout

Fears China's ChatGPT competitor is more cost effective and runs on less advanced chips sets off global tech sell off

Questions now being raised over the huge valuations on AI firms. Photographer: Lam Yik/Bloomberg

Chinese artificial intelligence startup DeepSeek rocked global technology stocks Monday, raising questions over America’s technological dominance.

Buzz grew over the weekend about DeepSeek’s latest AI model being cost-effective while running on less-advanced chips, casting doubt on the validity of the rich valuations for companies like Nvidia, which has led the global AI stock boom as its chips have been seen as essential to the technology. Shares of the Santa Clara, California-based firm slid 10% in premarket trading on Monday.