After the turmoil caused by the emergence of China’s new AI assistant, Deepseek, the U.S. technology stock market showed signs of recovery on Tuesday. NVIDIA, which suffered a record $593 billion market capitalization loss after a 17% share drop on Monday, rebounded by 8.9% on Tuesday, according to Reuters.
The steep decline on Monday was triggered by the launch of Deepseek, a low-cost AI assistant developed by a Chinese startup. The company claims that its AI model operates effectively with less data and at a significantly lower cost than conventional AI systems. However, analysts remain skeptical about the accuracy of these claims.
On Tuesday, the technology index rose by 3.6%, while the Philadelphia Semiconductor Index gained 1.1%. NVIDIA shares closed at $128.99, still below their Friday valuation of $142.62. Meanwhile, Oracle and Broadcom recovered by 3.6% and 2.6%, respectively.
Despite Monday’s sharp decline, investors have renewed interest in tech stocks. Experts suggest that while affordable AI models may disrupt the market, the demand for advanced semiconductor chips will remain strong. OpenAI CEO Sam Altman praised Deepseek as “an impressive model” but reassured that his company is working on even more advanced technology.
