Prominent US blue-chip stocks experienced a significant downturn on Monday, with the Nasdaq composite index dropping over 3 percent and the S&P 500 declining by 1.46 percent, according to CNBC. This market volatility has been linked to the notable rise of the China-based AI chatbot DeepSeek, sparking concerns about the growing influence of Chinese technology in the global marketplace.

In this turbulent environment, shares of AI-related technology companies were particularly hard hit. Broadcom and AMD saw their stocks decrease by 17 and 6 percent, respectively. Of particular note, shares of US chip giant Nvidia nosedived nearly 17 percent, resulting in a staggering loss of approximately $600 billion in market value within just one trading session.

This market upheaval coincides with DeepSeek's recent achievement of becoming the most downloaded application on Apple's US app store. Developed by a Hangzhou-based firm in 2023, DeepSeek operates as a free open-source large language model. Uniquely, it utilizes lower-capability Nvidia chips known as H800s for its development and training, which reportedly cost around $6 million, challenging the conventional narrative regarding the high costs typically associated with AI advancements.

In the wake of the stock market decline, Nvidia's spokesperson remarked to Bloomberg that DeepSeek represents an 'excellent AI advancement,' emphasizing that the creation of new AI models can effectively leverage existing technologies.

In a meeting with House Republicans, US President Donald Trump described the success of DeepSeek as 'positive,' indicating that it exemplifies how technological progress can be achieved at a lesser cost. Nevertheless, he framed the situation as a crucial reminder that American industries must remain competitive, deeming this development 'a wake-up call' to sharpen focus on global competition.

John McCoy, Vice Chairman of Nasdaq, echoed this sentiment. In comments to China Media Group, he asserted that AI will remain a significant revolution, with DeepSeek poised to play a crucial role in that evolution.

The consensus among industry insiders suggests that the emergence of DeepSeek marks a significant milestone for China's large model technology. Concurrently, it signals a potential decline in the United States' supremacy in advanced AI. Experts advocate for international collaboration in advancing AI technologies for the benefit of all nations.