Investing.com – European chipmakers and stocks exposed to data centers fell on Monday as investors worried about the implications of the launch of a new artificial intelligence model from Chinese company DeepSeek.
The startup has launched a free assistant to rival OpenAI’s ChatGPT, with the group saying its technology offers similar performance despite using cheaper chips and less data. On Monday, DeepSeek’s Big Language Model was the top-rated free app on the Apple (NASDAQ:) App Store in the United States.
Although some doubts have been raised about DeepSeek’s claims, the model still raises market concerns about the long-term bet that AI will fuel a chain of demand extending from semiconductors to data centers.
The launch and subsequent testing of DeepSeek’s main prototype has also raised questions about the recent surge in massive capital spending by US tech giants on building their own AI infrastructure — and the potential returns investors want to see from such a massive investment.
“DeepSeek clearly does not have access to as much computing as the US hyperscalers and has somehow managed to develop a model that looks very competitive,” analysts at DeepSeek said. Raymond (NSE:) James said in a note to clients. “A natural question is, how does the impact of the emergence of DeepSeek account for the growth in density and demand for devices/semiconductors?”
However, they noted that there is still “very limited information” about the DeepSeek product.
In European trading, ASML (AS:), the Dutch computer equipment maker whose clients include Intel (NASDAQ:), Samsung (KS:), and Taiwan’s TSMC, came under particular pressure. Meanwhile, peers ASM International (AS:) and BE Semiconductor Industries (AS:) fell more than 8%, and Schneider Electric (EPA:), Munters Group (ST:) and Siemens Energy (ETR:) also fell sharply.
Frankfurt-listed shares in Nvidia (NASDAQ:), which has been driven by enthusiasm around artificial intelligence in recent years to become one of the world’s most valuable companies, fell more than 8% as well. In pre-market trading in the US, the stock fell significantly.
Broader stock futures on Wall Street, including the tech-heavy Nasdaq contract, also pointed lower.
