Tech Stocks Take a Hit as AI Model Raises Concerns
The global technology sector is reeling from a massive selloff, with the ripple effects extending far beyond chipmakers and the industry’s top players. The catalyst behind this sudden downturn is an artificial intelligence model from Chinese startup DeepSeek, which has thrown a wrench into the dominance of US companies in the space.
Power Providers and Equipment Suppliers Feel the Pain
Shares of power providers and equipment suppliers to data centers have taken a beating, reversing gains made last week after US President Donald Trump announced a multibillion-dollar AI project. Siemens Energy AG, a leading player in the field, saw its stock plummet as much as 22%, wiping out its 2025 gains. Sweden’s Munters Group AB, which specializes in cooling technologies for high-performance servers, slumped 14%. Oklo Inc., a nuclear fission reactor company backed by OpenAI Inc.’s Sam Altman, fell 18% in premarket trading, erasing some of its 60% surge last week.
Broader Implications for the Industry
The declines are not limited to these companies, with bigger players like Nvidia Inc. and Dutch chip equipment maker ASML Holdings NV also feeling the heat. The selloff has raised questions about the sky-high valuations in the sector, sparking concerns about the sustainability of the industry’s growth.
Long-Term Demand Remains Strong
Despite the current turmoil, analysts believe that demand growth for companies like Siemens Energy, Schneider Electric SE, and Legrand SA will continue unabated. According to Omid Vaziri, an analyst at Bloomberg Intelligence, DeepSeek’s models could actually accelerate AI user adoption, driving long-term growth in the sector.
A New Era of Competition
The emergence of DeepSeek’s AI model marks a significant shift in the industry’s landscape, with US companies facing increased competition from Chinese startups. As the tech sector continues to evolve, one thing is clear: the stakes have never been higher.
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