American technology companies witnessed a decline in premarket trading, driven by concerns about competition in AI raised by China's DeepSeek, resulting in a worldwide sell-off.
Nvidia's shares dropped by 9.84% before the market opened, while European chip manufacturers ASML and ASM International experienced decreases of 10.59% and 14.94% respectively.
DeepSeek introduced a free, open-source large-language model, developed in only two months with a budget of under $6 million, casting uncertainty on the investments in AI made by major tech firms.
The developments by DeepSeek prompted a decrease of over 14% in the stock prices of power companies like Constellation Energy and Vistra Corp., as questions emerged about the energy consumption of AI applications.