DeepSeek's Rise Shakes Investor Confidence

In a surprising turn of events, Nvidia's shares fell by 8% in premarket trading this Monday. This significant drop comes as DeepSeek, a Chinese AI startup, makes waves with its R1 model, now leading the Apple App Store charts in the US. This unexpected success has sparked concerns over the future of Western AI dominance and the sustainability of heavy investments in AI hardware.

Market Reactions and Sector-wide Impacts

The success of DeepSeek has not only affected Nvidia but has also sent shockwaves across the tech industry. Both tech stocks and cryptocurrencies have seen declines, highlighting the broad impact of DeepSeek's breakthrough. At 4:04 am ET, Nvidia's shares were down 8.08% to $131.10 in premarket trading in New York.