Key takeaways from recent market disruptions:

• China's DeepSeek has developed a large language model, challenging U.S. tech giants.
• Major tech stocks like Nvidia saw losses exceeding 14%, contributing to a significant market downturn.
• The Dow Jones Industrial Average fared better, showing a smaller decline compared to tech-heavy indexes.
• Concerns about the sustainability of AI supply chains amid geopolitical tensions continue to rise.

On a tumultuous Monday for financial markets, Wall Street's tech stocks plunged as fears grew over a new competitor emerging from China. The HuffPost reported that as news broke of a Chinese company named DeepSeek unveiling a significantly cheaper AI language model capable of going toe-to-toe with major U.S. firms, the S&P 500 fell by 1.6% early in trading.

The decline hit especially hard for Nvidia, which experienced a staggering drop of 14.4%, dragging the Nasdaq composite down 2.8%. Conversely, the Dow Jones Industrial Average, less impacted by tech fluctuations, slipped only 0.1% at midday.

DeepSeek's app soared to the top of the Apple App Store, raising eyebrows across Wall Street, particularly in light of U.S. government restrictions on Chinese access to advanced AI chips. This success prompted skepticism about how DeepSeek managed to navigate these limitations, with analysts like Dan Ives from Wedbush Securities questioning the sustainability of such innovations.

The alarm bells rang not just on Wall Street but globally — ASML in Amsterdam dropped 6.6%, and Japan’s Softbank Group lost 8.3%. Notably, shares of Constellation Energy fell 19% due to its plans to reopen the Three Mile Island nuclear facility, which is aimed at powering massive data centers for tech firms.

Despite the turmoil, it is essential to recognize that tech stocks had previously surged. Nvidia, for instance, saw its stock price rise from below $20 to over $140 in just two years prior to this chaos. This volatility exemplifies the so-called “concentration risk” associated with betting on a small group of dominant companies dubbed the "Magnificent Seven," which holds considerable sway over the S&P 500.

Many experts urge caution amid the sell-off, asserting that the reported news from China could be overstated, and thus lead to potential investment opportunities once the initial panic subsides. Nonetheless, the ongoing uncertainty surrounding AI markets and geopolitical tensions is likely to remain in play as the Federal Reserve approaches its latest policy meeting, where it is expected to hold steady on interest rates.

To delve deeper into this ongoing story and its implications for the financial markets, you can visit the full articles at Al Jazeera, Los Angeles Times, VOA News, and HuffPost.