US semiconductor companies such as Nvidia (NVDA) and Broadcom (AVGO) rebounded in premarket activity early Tuesday following a sharp sell-off in the previous regular trading session when an emerging Chinese artificial intelligence platform challenged its US rivals.
DeepSeek, a private Chinese AI firm, launched a free, open-source large-language model, claiming it was developed in two months using reduced capability chips from Nvidia and at under $6 million, according to a Wedbush Securities note Monday.
Shares of Nvidia, which sank almost 17% on Monday, were up 4.8% early on Tuesday.
Technology research group Futurum's Chief Executive Officer Daniel Newmann said Monday in a message on X that Nvidia has issued a statement: "DeepSeek is an excellent AI advancement and a perfect example of Test Time Scaling."
"DeepSeek's work illustrates how new models can be created using that technique, leveraging widely available models and compute that is fully export control compliant. Inference requires significant numbers of NVIDIA GPUs and high-performance networking," Nvidia was further cited as saying.
Marvell Technology (MRVL) was up 3.6% premarket Tuesday after slumping 19% on Monday. Broadcom (AVGO) traded 4.5% higher pre-bell after dropping more than 17% the previous day. Micron Technology (MU) climbed 2.4% in early activity versus a decline of almost 12% in the prior trading session.
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