March S&P 500 E-Mini futures (ESH25) are down -2.43%, and March Nasdaq 100 E-Mini futures (NQH25) are down -3.78% this morning as worries mount that a cheaper artificial intelligence model from China could challenge the supremacy of U.S. technology.
Chinese artificial intelligence lab DeepSeek’s latest chatbot threatened to disrupt U.S. firms’ dominance in AI, triggering a global selloff in the tech sector. DeepSeek announced that it developed AI models nearly on par with American rivals, despite using inferior chips and less data. This has raised questions about the lofty valuations of AI-related stocks and Silicon Valley’s business model, which relies heavily on extensive research and development spending. On Monday, DeepSeek’s AI Assistant surpassed ChatGPT to become the highest-rated free application on the U.S. Apple App Store.
