U.S. tech stocks plunge over sudden popularity of low-cost Chinese AI app DeepSeek

Global investors threw out U.S. tech stocks on Monday over worries that the low-cost Chinese AI startup DeepSeek would overtake the current AI frontrunners.

In just a week after its launch of a free AI assistant, DeepSeek on Monday became the most downloaded free app in the U.S., overtaking ChatGPT.

DeepSeek was founded in 2023 in Hangzhou city by 40-year-old information and electronic engineering graduate Liang Wenfeng.

Following the sudden popularity of the Chinese app, the tech-heavy Nasdaq shed over 3% on Monday, and Nvidia lost over a sixth of its value.

U.S. President Donald Trump called DeepSeek's strong showing a wake-up call for the tech sector.