DeepSeek's AI Impact on US Markets

In a dramatic start to the week, US stock futures experienced a sharp decline during premarket trading. This downturn was primarily triggered by the disruptive emergence of DeepSeek, a Chinese AI company, whose R1 model has unexpectedly soared to the top of the Apple App Store charts.

Market Reactions and Downturns

By 3:28 am ET, the Dow Jones Industrial Average had decreased by 0.83%, shedding 366.98 points. The Nasdaq 100 and the S&P 500 were not spared, with drops of 3.01% and 1.83% respectively. Additionally, the euro saw a slight decline against the dollar, trading at 1.04744, down by 0.19%.

Investor Concerns Over AI Hardware

The remarkable success of DeepSeek's R1 model has led to growing concerns among investors about the sustainability of heavy investments in AI hardware within the US. This development has prompted a reevaluation of long-term investment strategies in the tech sector.