DeepSeek has launched an AI model that was reportedly developed with significantly less computational power than traditional methods. Shares of Nvidia are under pressure amid concerns that DeepSeek's methods may undermine demand for its high-performance GPUs.

Chuck Zodda, managing partner and Chief Investment Officer from the Armstrong Advisory Group discusses the dip of tech stocks, especially Nvidia after the announcement of Chinese AI start-up DeepSeek.

US tech giant Nvidia lost over a sixth of its value after the surging popularity of a Chinese artificial intelligence (AI) app spooked investors in the US and Europe. DeepSeek, a Chinese AI chatbot reportedly made at a fraction of the cost of its rivals, launched last week but has already become the most downloaded free app in the US.

With Monday’s losses, Apple has retaken the title of world’s most valuable company and Nvidia’s value sank to around $2.8 trillion.

The company that lifted the tech industry and drove A.I. spending for the last several years, suffering the biggest one day wipeout of wealth in U.S. Monday.

Mostly known only in gaming and crypto circles a few years ago, Nvidia burst into the zeitgeist after seeing its sales surge because customers wanted its chips to train their chatbots and other artificial intelligence products.