LIVE Chinese AI bot DeepSeek sparks US market turmoil, wiping $500bn off major tech firm Shares for leading US chip-maker Nvidia dropped more than 15% after the emergence of DeepSeek, a low-cost Chinese AI bot.

 On January 27, 2025, the U.S. stock market experienced significant turmoil, primarily due to the emergence of DeepSeek, a Chinese AI startup. DeepSeek introduced an advanced AI model, R1, which reportedly offers performance comparable to leading models from companies like OpenAI and Google, but at a fraction of the cost. This development raised concerns among investors about the potential impact on U.S. tech companies heavily invested in AI infrastructure. 

In response to these developments, Nvidia's stock price fell sharply, closing at $117.86, a decrease of approximately 17.4% from the previous close.

The broader technology sector also experienced significant declines. The Nasdaq Composite index dropped about 3.5%, and the S&P 500 fell by nearly 2%, reflecting widespread investor apprehension. 

Despite the market's reaction, some analysts view the situation as a potential buying opportunity, suggesting that the competitive landscape in AI is intensifying and that U.S. companies may need to focus more on cost efficiency. 

This event underscores the dynamic nature of the technology sector and the significant impact that emerging innovations can have on established market l

eaders.