31 January 2025

US tech stocks partly recover after Trump says DeepSeek AI chatbot is ‘wake-up call’

Mark Sweney

US tech stocks tentatively recovered on Tuesday after Donald Trump described the launch of a chatbot by China’s DeepSeek as a “wake-up call” for Silicon Valley in the global race to dominate artificial intelligence.

The emergence of DeepSeek, which has built its R1 model chatbot at a fraction of the cost of competitors such as OpenAI’s ChatGPT and Google’s Gemini, wiped $1tn (£800bn) in value from the leading US tech index on Monday.

Nvidia, a leading maker of computer chips that has experienced explosive growth amid the AI boom, had $600bn wiped off its market value in the biggest one-day fall in US stock market history.

The market fall spread to Asia on Tuesday, as Japan’s Nikkei share average fell 1.3%. Japanese-listed tech stocks fell, as the manufacturer Advantest was down 11%, Tokyo Electron off almost 6% and Disco Corporation dropped nearly 3%. Stock in the tech investor SoftBank fell more than 5%.

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