Following a steep sell-off on Wall Street on Tuesday, Japanese tech companies plummeted as China’s DeepSeek chatbot upended the artificial intelligence industry, casting doubt on US tech titans’ large expenditures.
Reports that Washington was considering imposing global tariffs on a variety of items caused the dollar to rise, reigniting concerns of a trade war.
Artificial intelligence-related businesses in Tokyo saw a second straight day of declines, following a Wall Street crash in which Nvidia’s stock sank 17%, wiping out more than half a trillion dollars from its market valuation.
The unveiling of DeepSeek’s R1 chatbot, which supposedly challenges the skills of US AI leaders at a fraction of their investment expenditures, set off the sell-off.
Trump described the development as a “wake-up call” for US tech firms.
“Instead of spending billions and billions, you’ll spend less and, hopefully, achieve the same results,” he said. However, OpenAI CEO Sam Altman called DeepSeek’s chatbot “impressive.”
The Nasdaq dropped more than 3%, with the S&P 500 shedding over 1%. Broadcom, another US chipmaker, fell 17.4%.
