Technology stocks fell sharply in Asia after the emergence of Chinese artificial-intelligence startup DeepSeek triggered a selloff in AI-related stocks overnight and cast uncertainty over the rising demand for data centers.

It all stemmed from a free AI assistant launched by Chinese startup DeepSeek last week that the firm sa id uses less data at a fraction of the cost of services available currently, garnering significant attention worldwide including from OpenAI CEO Sam Altman who called it an “impressive model”.

Japanese technology shares plunged on Tuesday as the global market turmoil, triggered by a groundbreaking Chinese artificial intelligence model DeepSeek, extended into its second day. Investors are now reassessing the dominance and valuations of leading AI firms.

The company that lifted the tech industry and drove A.I. spending for the last several years, suffering the biggest one day wipeout of wealth in U.S. Monday.

Chinese startup DeepSeek has achieved what many (including experts) thought impossible: create a foundational, competitive AI model for just $5.6 million. By comparison, OpenAI’s unreleased GPT-5 (codenamed “Orion”) reportedly requires $500 million for six months of training.