Dell Technologies Inc.'s stock experienced a significant pre-market plunge of 7.68% on Monday, as concerns over the impact of an inexpensive Chinese artificial intelligence (AI) model called DeepSeek rattled the tech sector.
The futures linked to the tech-heavy Nasdaq index tumbled, with megacap stocks like Nvidia, AMD, and Microsoft among the worst hit. The overwhelming popularity of DeepSeek, a free assistant that claims to use lower-cost chips and less data, sparked a selloff in AI-related shares, challenging the widespread belief that AI will drive demand for products and services across the supply chain, from chipmakers to data centers.
As a prominent provider of AI servers, Dell Technologies was caught in the crosshairs of this market turmoil. Concerns over the potential threat posed by DeepSeek to the burgeoning AI industry, which has been a driving force behind the gains in major tech indices, weighed heavily on Dell's stock price during pre-market trading.
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