How DeepSeek managed to devastate US tech industry

The Chinese startup inflicted more than 1 trillion in losses, writes Anthony Cuthbertson, with Nvidia suffering the most

- ANTHONY CUTHBERTSON

The sudden arrival of a little-known Chinese app called DeepSeek to the top of the app charts over the weekend sent the US tech industry into a trillion-dollar tailspin.

In the space of a few hours, several of the world’s biggest companies saw their stock plummet, with Nvidia experiencing the biggest one-day loss in market value in history – more than $500bn (£402bn).

The shock was caused by how quickly a relatively unknown AI startup could catch up with the best apps developed by the US giants. DeepSeek’s R1 chatbot came with similar capabilities to OpenAI’s most advanced ChatGPT tool, while also being freeto-use, open-source, and developed at a fraction of the cost.

US president Donald Trump described the artificial intelligence chatbot as a “wake-up call” for the industry, with tech firms suffering significant dips in their share prices on Monday morning. The worst hit were the chip makers, which have experienced a massive surge in value since the rise of generative AI and the increased demand for their products. Nvidia and Broadcom both saw their value drop by around a fifth.