By Mauro Orru
Global chip stocks slumped Monday after Chinese artificial-intelligence company DeepSeek said it developed AI models that nearly matched American rivals despite using inferior chips, raising fears it could disrupt the global dominance of U.S. tech.
DeepSeek said its R1 and V3 models--both in the top 10 on ranking platform Chatbot Arena--performed better than or close to leading Western models. The company said training one of its latest models cost $5.6 million, compared with the $100 million to $1 billion range cited last year by the CEO of U.S. rival Anthropic.
DeepSeek said in a technical report that it used a cluster of more than 2,000 Nvidia chips to train its V3 model, compared with tens of thousands of chips that are normally used for training models of similar size.
The E-mini Nasdaq 100 futures contract trades 3% lower early Monday, signaling the tech-heavy index is expected to extend losses at the open. Nvidia shares slumped 7% premarket, with Micron Technology down more than 6% and Advanced Micro Devices shedding nearly 4%.
Swissquote Bank's Ipek Ozkardeskaya said futures were hammered by news that DeepSeek could run its latest AI models on less advanced chips, raising fears it could disrupt the global dominance of U.S. tech.
In Europe, shares of Dutch semiconductor-equipment maker ASML Holding and its smaller rival ASM International were both down more than 10% in Amsterdam. In Asia, shares of chip-making equipment supplier Tokyo Electron closed nearly 5% lower.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
January 27, 2025 04:45 ET (09:45 GMT)
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