Shares of semiconductor makers were dropping early Monday as a Chinese AI model triggered questions over their lofty valuations.

Tech stocks plunged Monday morning, as fears mounted that Chinese artificial intelligence firm DeepSeek leapfrogged U.S. dominance in AI development.

The emergence of China-based AI app DeepSeek sent shares plummeting on Monday for many U.S. tech giants, including chipmaker Nvidia and AI-backer Microsoft. Nvidia, which helped catapult market wide gains in recent years,

DeepSeek topped the Apple App Store chart and sparked fears the Chinese company was quickly catching up with OpenAI's ChatGPT while costing far less.

Reports that Chinese AI lab DeepSeek has created an AI model that rivals U.S. models sent shockwaves through AI chip stocks on Monday.