IONQ Inc., a leading player in the quantum computing industry, saw its stock plummet 12.9% in pre-market trading on Monday, underscoring the growing concerns surrounding the potential impact of China's DeepSeek AI lab's progress on the sector.

The sell-off in IONQ's shares was triggered by reports that DeepSeek had released a powerful new AI model that it claims was built at a relatively low cost using less advanced chips. This development has raised fears that the demand for the expensive AI chips and hardware required by quantum computing companies like IONQ could be undermined, potentially disrupting the competitive landscape and growth prospects for the industry.

As one of the pioneers in the quantum computing space, IONQ's stock was particularly vulnerable to the ripple effects of DeepSeek's AI breakthrough. Investors and analysts have expressed concerns that advancements in low-cost AI models could pose a significant challenge to the viability of quantum computing technologies, which rely heavily on specialized and costly hardware components.