Nvidia shares closed down almost 17%, posting its biggest drop since March 2020 and erasing nearly $600 billion from the company's market cap. Broadcom fell 17.4%, and other chip stocks like Micron declined 11.

US President Donald Trump has called Chinese AI start-up DeepSeek's strong showing a "wake-up call" and "positive" for America's tech sector, and also warned that he would slap tariffs on foreign-made semiconductor chips,

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

Chip stocks in the U.S. and Europe rose on Wednesday for a second straight day, recovering from a punishing selloff triggered by China's low-cost DeepSeek artificial intelligence tool at the start of the week.

U.S.-listed shares of tech giants are gaining some lost ground this morning after a China-based startup shocked the AI world with a powerful LLM. Yesterday, shockwaves rippled across the American tech industry after news spread over the weekend about a powerful new large language model (LLM) from China called DeepSeek.