Tech stocks plunged on Monday after claims of advances by Chinese artificial intelligence (AI) startup DeepSeek cast doubts on United States firms' ability to cash in on the billions they have already invested on AI.

Shares in chipmaker Nvidia, Microsoft and Meta all fell in early trading, with the tech-heavy Nasdaq also taking a serious tumble.

The fall is tied to DeepSeek's recent release of its latest large language AI model, which claims to match the performance of leading US rivals such as OpenAI despite spending far less money and using far fewer Nvidia chips.

The company explained in a detailed paper on January 20 how it had built the cutting-edge model on a budget which is a tiny fraction of what US AI firms might expect to pay to make the same gains.

The claims have raised doubts among investors about the ongoing AI boom in Silicon Valley, which has seen company valuations soar over the past two years on the back of expectations around the growth potential of AI.

Meanwhile DeepSeek's AI Assistant app, which was released on January 10, on Monday overtook rival ChatGPT to become the top-rated free application on Apple's App Store.

DeepSeek's growing popularity, and its detailed explanation for........

© Deutsche Welle