U.S.-listed shares of tech giants are gaining some lost ground this morning after a China-based startup shocked the AI world with a powerful LLM. Yesterday, shockwaves rippled across the American tech industry after news spread over the weekend about a powerful new large language model (LLM) from China called DeepSeek.

Nvidia closed higher on Tuesday as some investors seized an opportunity to buy the chip giant at a discount following its record wipeout on Monday.

Chip stocks in the U.S. and Europe rose on Wednesday for a second straight day, recovering from a punishing selloff triggered by China's low-cost DeepSeek artificial intelligence tool at the start of the week.

The launch of Deepseek has been framed as the AI race’s Sputnik but the timing is dubious and questions are being asked about whether the tech is really as game-changing as its creators claim. Either way,

DeepSeek’s AI breakthrough challenges Big Tech with a cheaper, efficient model. This may be bad for the incumbents, but good for everybody else.

Global technology shares recovered some poise on Tuesday, but remained vulnerable after a rout sparked by the emergence of a low-cost Chinese artificial intelligence model made investors question the sky-high valuation and dominance of AI bellwethers.

The startup has said its models either match or outperform rivals at a fraction of the cost, challenging the view that AI requires vast investment.

The U.S. tried to slow China’s advances, but the startup showed how hard that is.

President Donald Trump said DeepSeek’s AI advances should be a “wake-up call” for the U.S.

The artificial intelligence boom is a two-edged sword for $290 billion ASML . Shares in the Dutch maker of lithograph machines used to make chips soared by 8% on Wednesday thanks to booming demand from semiconductor manufacturers such as TSMC .

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