In contrast, the Dow Jones Industrial Average gained 289.33 points, or 0.65 percent, closing at 44,713.58, buoyed by gains in Apple, Johnson & Johnson, and Travelers.
DeepSeek recently launched R1, an open-source reasoning model that reportedly outperformed OpenAI’s in several tests.
The startup stated that the initial version of its large language model, released in late December, cost under US$6m to design.
While Wall Street has questioned the accuracy of this figure, the claim has raised concerns about the ability to create high-performing AI models with much lower investment.
AI-related stocks suffered significant losses. Nvidia dropped nearly 17 percent, Broadcom fell 17.4 percent, and AMD declined 6.4 percent. Microsoft and Palantir also faced setbacks, losing 2.1 percent and 4.4 percent, respectively.