US tech stocks plunge on China AI's unexpectedly strong showing
Khushboo Razdan in Washington and Mark Magnier in New York Published: 1:53am, 28 Jan 2025 The US markets got a loud wake-up call on Monday when shares of major US artificial intelligence and semiconductor companies slumped on a wave of fear that Chinese companies were poised to surpass them in the high-stakes battle for supremacy.
Analysts were divided on whether the panic selling and sentiment behind it were an overreaction or an indication that Silicon Valley has underestimated Chinese tech prowess and its ability to circumvent the many export bans and speed bumps Washington has imposed. The catalyst was Chinese AI start-up DeepSeek strong showing over the weekend overtook OpenAI's ChatGPT as the most-downloaded free app in the US on Apple 's App Store over the weekend. American semiconductor giant Nvidia 's stock price at noon on Monday, for instance, was down 21.28 per cent, having recovered from a low of 25 per cent.
Broadcom, Micron Tech, Oracle, Microsoft and Alphabet, Google's parent, were all among tech companies seeing losses in morning trading.
By early Monday afternoon, the Nasdaq was down 3.25 per cent, with the S&P off 1.71 per cent and the Dow up 0.04 per cent as of noon.
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