Asian technology stocks fell sharply Monday as Chinese AI startup DeepSeek sparked sector-wide concerns about artificial intelligence investment sustainability and pricing pressures, triggering selloffs in chip-related shares while boosting some Chinese tech giants.<\/p>\n
Japanese chip equipment manufacturers bore the brunt of selling, with Disco Corp dropping 2.6% and Advantest plunging 8.8%. China\u2019s top chipmaker SMIC declined 2.9%, mirroring pre-market weakness in Nvidia shares after U.S. trading signals. The selloff followed DeepSeek\u2019s launch of its R1 model last week\u2014a ChatGPT competitor that venture capitalist Marc Andreessen called<\/a> “AI\u2019s Sputnik moment” on X, referencing the Soviet satellite that triggered the space race.<\/p>\n Tokyo Electron and Fujikura saw concentrated selling after months of AI-driven gains, with Furukawa Electric plummeting 11.3%\u2014the worst performer in Japan\u2019s Nikkei 225. The cable manufacturer had surged since November due to data center demand before Monday\u2019s reversal. A Tokyo-based fund manager linked the tech rout to recalculated AI hardware expectations: “The market was readjusting to the idea that hardware spending on AI could be a lot lower than current estimates.”<\/p>\n How to setup DeepSeek-R1 easily for free (online and local)?<\/a><\/strong><\/p>\n Japan\u2019s Topix index rose 0.2% as investors reacted to the Bank of Japan\u2019s 0.25% rate hike last week. Shares of Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group all climbed about 1% on expectations of improved lending margins. This contrasted with the tech-heavy Nikkei\u2019s performance, highlighting sector-specific impacts from the AI news.<\/p>\n Bernstein analysts revealed Sunday that DeepSeek\u2019s models undercut OpenAI by 20-40 times on pricing. The Chinese firm charges $0.55 per million tokens for its Reasoner model compared to OpenAI\u2019s $15 for equivalent usage of its o1 model. Tokens\u2014the basic units AI uses to process text, equivalent to about three-quarters of a word\u2014have become a key cost metric in generative AI operations.<\/p>\n DeepSeek\u2019s open-source approach contrasts sharply with OpenAI\u2019s closed system, with Bernstein noting the development “brings up very interesting questions about the viability of proprietary versus open-source efforts.” The pricing gap coincides with DeepSeek topping U.S. App Store downloads ahead of ChatGPT, despite being a relatively unknown Chinese startup until recently.<\/p>\n Barclays\u2019 Mitul Kotecha highlighted market surprise at China\u2019s tech advancements: “The fact they\u2019re able to achieve high-end tech has caught a lot of people by surprise… this seems to be what\u2019s driving the shift in sentiment today.” The comments follow U.S. efforts to restrict Chinese access to advanced semiconductor technology through export controls.<\/p>\n Hong Kong\u2019s Hang Seng Index gained 0.9% led by Tencent (+1.2%) and Alibaba (+0.8%), while Chinese AI specialist iFlytek rose 1.75%. The divergence reflects both DeepSeek\u2019s domestic success and lingering questions about global AI infrastructure needs. U.S.-listed Chinese tech stocks showed early strength in pre-market trading despite the semiconductor sector\u2019s woes.<\/p>\n
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\nBanking sector diverges from tech slump<\/h3>\n
DeepSeek’s pricing upends AI economics<\/h2>\n
Open-source vs proprietary model debate<\/h3>\n
Mixed regional market reactions<\/h2>\n
Uncertainty over selloff duration<\/h3>\n