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Nvidia falls 14% in premarket trading as China's DeepSeek triggers global tech sell-off
DeepSeek launched a free, open-source large-language model in late December, claiming it was developed in just two months at a cost of under $6 million.
U.S. technology firms plunged in premarket trading, as Chinese startup DeepSeek sparked concerns over competitiveness in AI and America's lead in the sector, triggering a global sell-off. "DeepSeek clearly doesn't have access to as much compute as U.S. hyperscalers and somehow managed to develop a model that appears highly competitive," Srini Pajjuri, semiconductor analyst at Raymond James, said in a note Monday. On one positive implication, Pajjuri said DeepSeek could "drive even more urgency among U.S. hyperscalers" — which are large computing infrastructure players like Amazon and Microsoft — to leverage their advantage in having access to graphics processing units (GPUs) to set themselves apart from cheaper options.
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