The AI tech startup DeepSeek’s investment model has sent shockwaves through US tech giants as their stocks are plummeting.
Chip maker Nvidia suffered a drop of 17% on Monday and the US President Donald Trump has said this is a “wake up call” for AI tech giants.
Nvidia suffered a record loss in market value of $589 billion, however the firm “could stage” a recovery during Tuesday’s trading. The S&P 500 fell 2.5% mainly due to Nvidia’s huge losses.
Japan’s Softbank fell 8.3% and ASML who are a Dutch chip maker suffered losses of 7% amid DeepSeek.
Kathleen Brooks, research director at investment firm XTB, said, “How does Trump react to a threat against the US AI dominance? He threatens wide-ranging tariffs on foreign-produced semiconductors, pharma and metals.
“Since Nvidia uses chips produced by TSMC in Taiwan, it could be hit by the tariffs.
“However, the 17% drop in its share price on Monday, which led to a record 589bn dollar loss in its market cap, may have gone too far and there are early signs in European trading that Nvidia could stage a recovery on Tuesday.”
A Downing Street spokesman said on Tuesday that the UK must “go further and faster to remove barriers to innovation” regarding AI.
He was asked if the government will be open to using Chinese AI such as DeepSeek in Whitehall, the Prime Minister’s official spokesman said, “We’ve got some of the strongest data protection laws in the world and we will always ensure personal data and the operation of public services is handled responsibly and securely.
“But more broadly on the developments over the last few days, the rapid development and breakthrough of new AI models demonstrates exactly why the UK is so focused on AI and why we need to go further and faster to remove barriers to innovation here to make the UK a more competitive market.
“And whilst we’ve already got the third largest AI market in the world, we’ve got an opportunity to get ahead and do more, and that’s what our AI Opportunities action plan is all about.”
Leave a Comment