AI Stocks Crash as DeepSeek Surpasses ChatGPT as the Top-Rated Free App in US

In a significant development shaking the global technology landscape, Chinese AI startup DeepSeek has emerged as a formidable contender against established US tech giants. Surpassing ChatGPT to become the top-rated app on Apple’s App Store in the US, DeepSeek’s efficient AI models are prompting a reevaluation of the AI sector’s dynamics. This has led to many tech stocks such as Nvidia (NASDAQ: NVDA) seeing a dramatic stock price correction.

How One Startup from China Shook Up the AI World

DeepSeek’s rapid ascent in the AI market has sent ripples through the global tech industry. By developing AI models that are both efficient and cost-effective, the startup has challenged the dominance of US-based companies. This development has led investors to reassess the profitability and demand within the AI sector, particularly concerning high-tech chips.

As a result and a likely reaction to this emerging trend, global technology stocks have experienced a sharp decline in the premarket trading session today.

The emergence of DeepSeek as a leading AI player has significant implications for the ongoing technological rivalry between the US and China. The startup’s success challenges the effectiveness of US export controls to limit China’s access to advanced AI technologies.

This development may compel US companies, such as OpenAI and Meta (NASDAQ: META), to reconsider their pricing strategies and competitive positioning in the market.

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US Stock Market Reactions: NVDA, ORCL, MSFT, and META

The rise of DeepSeek has coincided with notable movements in the stock prices of major tech companies. NVDA opened at $142.62 but saw a decline to a premarket price of $127.92, a drop of over 10%. Similarly, ORCL experienced fluctuations, opening at $183.60 and a current price of $170.18 in premarket trading.

MSFT and META also showed variability, with MSFT opening at $444.06 and currently trading at $421.00, while META opened at $647.49 and is trading at $624.10 at the time of writing.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.