section_path: Reactions/Stock market implications
section_name: Stock market implications
paragraph_text: Stock market implications
  
  DeepSeek's optimization of limited resources has highlighted potential limits of United States sanctions on China's AI development, including export restrictions on advanced AI chips to China. The success of the company's AI models consequently "sparked market turmoil" and caused shares in major global technology companies to plunge on 27 January 2025: Nvidia's stock fell by as much as 17–18%, as did the stock of rival Broadcom. Other tech firms also sank, including Microsoft (down 2.5%), Google 's owner Alphabet (down over 4%), and Dutch chip equipment maker ASML (down over 7%). A global sell-off of technology stocks on Nasdaq, prompted by the release of the R1 model, led to record losses of about $593 billion in the market capitalizations of AI and computer hardware companies; and by the next day a total of $1 trillion of value was wiped from American stocks.