Japanese chip stocks fall as DeepSeek challenges US AI dominance as threat to Asian tech companies

Japanese chip stocks fell on Monday after worries that Chinese AI startup DeepSeek could challenge America’s global artificial intelligence leadership, raising concerns among Asian tech companies about the U.S.-dependent AI value chain.

Shares of semiconductor test equipment suppliers AdvantestIt counts Nivea 7.99 percent of the customers decreased. Tokyo Electron lost 3.94 percent, while Renesas Electronics shed 0.4 percent.

SoftBank Group, which owns the chip maker’s arm, slipped 5.4% in the week’s highs after CEO Masayoshi Son announced plans to invest $100 billion in the U.S.

“Japanese chip stocks sold off sharply on DeepSeek concerns and we’re seeing a rotation from growth names to value,” Andrew Jackson, head of equity strategy at ORTUS Advisors, told CNBC in an email.

Data center-related stocks, buoyed by high-tech infrastructure spending, will also take a hit, he said.

Shares of wire and cable companies Furukawa And Fujikura It also decreased by 9.8 percent and 8.16 percent.

DeepSeek launched a free, open-source big-language model in late December, which was developed in Only two months At a cost of less than 6 million dollars. Last week, the lab launched r1, OpenAI’s new o1 past reasoning model with many third-party tests.

The new developments have raised concerns about the huge amount of money big tech companies are investing in AI models and data centers. DeepSeek also had to contend with tough semiconductor restrictions placed on China by the US government, limiting access to advanced chips.

“While it remains to be seen if DeepSeek is a viable and cheaper option in the long term, initial concerns centered on whether the US tech giant’s pricing power is at risk and their high AI spending needs to be reassessed.” IG market strategist Junrong Yap said in a note.

DeepSeek It has become the most downloaded free app on Apple iPhone.

The fall in Japanese chip stocks comes as Nasdaq futures fell 1.62% in Asian trading hours.

“We could be in for a rough ride in the U.S. tonight given the move on Nasdaq futures,” Jackson added.

Canadian-American venture capitalist and Social Capital CEO Chamath Palihapitiya said, “With this low-cost model, many new products and experiences can now emerge that try to win the hearts and minds of the global population.” X on social mediaLooking at the volatility in the stock market as a capital market, the “Magnificent 7” wants to buy back the values ​​of the companies.

“Nvidia is very vulnerable for practical reasons,” he said.