This is a significant development that threatens the future of the US economy.

The race for domination in artificial intelligence was blown wide open on Monday after the launch of a Chinese chatbot wiped $1tn from the leading US tech index, with one investor calling it a “Sputnik moment” for the world’s AI superpowers.

 

Investors punished global tech stocks on Monday after the emergence of DeepSeek, a competitor to OpenAI and its ChatGPT tool, shook faith in the US artificial intelligence boom by appearing to deliver the same performance with fewer resources.

The tech-heavy Nasdaq Composite closed down 3.1%, with the drop at one point wiping more than $1tn off the index from its closing value of $32.5tn last week, as investors digested the implications of the latest AI model developed by DeepSeek.

The most important aspect of this is to, once again, highlight how we will never take the economic leaps ahead of China that our work and ingenuity deserve until we secure American IP from being stolen. This is a warning shot that China is intent on taking the leadership in the tech sector just as they did in manufacturing.

This also should refocus investment efforts in the US. If the value of a company can be destroyed overnight because China stole their IP, it makes every investment in AI that much riskier.