DeepSeek’s AI model drives losses in US tech stocks

(MENAFN) US stocks closed on a mixed note Monday, with the release of DeepSeek's new AI model, R1, sending tech shares into a sharp decline. The model’s competitiveness in the AI space triggered significant losses for major chipmakers, including US-based Nvidia, which saw its stock drop by nearly 17 percent. This loss in market value marked the largest daily loss for any company in US history, with Nvidia’s valuation plunging by more than USD500 billion.

Broadcom, another chip company, also experienced a significant drop in its share price, falling by 17.4 percent. Other tech giants were affected as well, with Alphabet’s shares dropping by 4 percent and Microsoft’s shares losing 2 percent. The impact of DeepSeek's AI model on the market served as a reminder of how competition in the tech industry can have far-reaching consequences, especially when it comes to AI advancements.

Meanwhile, on the macroeconomic front, new home sales in the US saw a positive uptick in December, rising by 3.6 percent, which exceeded market expectations and provided a glimmer of optimism in an otherwise challenging market day.

In terms of major stock indices, the Dow Jones Industrial Average managed to rise by 0.65 percent, or 289.33 points, finishing the day at 44,713.58. However, both the S&P 500 and the Nasdaq Composite saw significant losses, with the S&P 500 falling by 1.46 percent and the Nasdaq dropping by 3.07 percent.

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