US Tech Stocks Under Pressure as China’s Deep Seek AI Models Surge, Shaking Investor Confidence – Century Financial

Comments on Deep Seek : 

Global equity markets, particularly the big tech names from the US, have started the week with a bloodbath of sorts. The latest developments arising out of China have rattled the core of US Big Tech’s existence. AI models from Deep Seek, the Chinese company, have zoomed to the global top 10 in performance on a popular ranking metric. Also, the newly introduced R1 model is said to be very apt and even better in some mathematical computational aspects vis-a-vis ChatGPT. The latest analysis by top US VC analysts even points out that this could be a massive breakthrough to revolutionise the entire global AI order.

While widely perceived as prohibitively expensive for AI research and engineering, Chinese models from Deep Seek have proved that with an engineering cost fraction of what was deployed by ChatGPT, the AI models are still deployable and usable across the spectrum by managing resources properly.DeepSeek said training one of its newest models cost $5.6 million, compared with a range of $100 million to $1 billion cited last year by Dario Amodei, chief executive of the AI developer Anthropic, as the cost of building a Model.

Also, contrary to the standard data centre expansion and huge investments in GPU chips by big US Tech, Chinese AI models are said to have deployed as few as 2,000 NVIDIA chips against the standard US models, which have deployed 10,000 + GPUs.News on Deep Seek presently is at a very nascent stage. The markets would, therefore, have to wait for more clarity on how exactly the models were built at 5 % of the actual cost (being incurred by top US big tech names ).As we approach the tech-heavy earnings season, markets would always question the sky-high valuations of the top US names.
China has always been a champion in providing goods and services at a low cost. At the same time, it has never killed or demolished the US dominance. Many questions were raised on exactly how these Chinese models managed to execute AI models with such low pricing.

Deep Seek news could be yet another panic-driven event in the market. Going forward much depends on how the actual earnings of these big tech names finally come in.

Gulf Market
The ADX General is advancing slightly to 9,556.96 in Abu Dhabi in early trading. International Holding Co. PJSC contributed the most to the index gain, increasing 0.2%. Sharjah Cement & Industrial Development Co. had the largest increase, rising 3.0%.
The DFM General Index opened 0.4% higher at 5,211.78 in Dubai. Emaar Properties PJSC contributed the most to the index gain, increasing 0.8%. SHUAA Capital PSC had the largest increase, rising 3.5%.
The Tadawul All Share Index opened 0.2% higher at 12,395.88 in Riyadh. In early trading, telecommunications stocks led the market higher, as 13 of 20 sectors gained; 94 of 246 shares rose, while 104 fell.
Oil edged higher after sinking by almost 2% on Monday, as traders weighed US President Donald Trump’s latest threats to jack up trade tariffs, together with risks to crude supplies from Libya’s major ports.
Brent crude traded above $77 a barrel, while West Texas Intermediate was near $74. In a series of remarks, Trump said he favored across-the-board tariffs “much bigger” than 2.5% and charges on some foreign-made goods in the “near future,” listing products including steel, aluminum and copper.

Cryptocurrency 
Digital assets are nursing losses amid an upheaval in global markets sparked by Chinese artificial intelligence startup DeepSeek, a selloff that raises questions about the crypto outlook after last year’s boom.
Bitcoin churned at $101,800, holding most of a 3% drop from the prior session. Tokens such as Ether and Solana shouldered bigger hits in the slipstream of a plunge in the Nasdaq 100 Index of US tech stocks. The sudden success of DeepSeek’s open-source platform signals growing AI competition from China, exacerbating worries over the sector’s rich valuations in the US. The risk for crypto is that equity market angst erodes wider speculative appetite, countering the tailwind from President Donald Trump’s executive order in favor of supportive digital-asset regulations.
The token reached a record of $109,241 ahead of Trump’s inauguration on Jan. 20 but subsequently slipped back. Trump’s pro-crypto stance remains a powerful pillar of support. If the Trump administration moves forward with an aggressive pro-crypto policy, Bitcoin and digital assets are in line for favorable repricing even with traditional market demand waning.
For Bitcoin, a range from $90,000 to $110,000 will likely continue to hold for some time as the market consolidates.

Gold
Gold prices declined as investors reacted to President Donald Trump’s recent tariff threats. Bullion hovered around $2,740 per ounce following Trump’s announcement of potentially impending tariffs, which sparked inflationary concerns and led to a slight rebound in US Treasury bond yields. Gold investors also closely monitored the repercussions of a Wall Street sell-off triggered by a low-cost artificial intelligence model developed by Chinese startup DeepSeek, which could challenge valuations in the tech sector. On Monday, gold experienced a 1.1% decline as traders sold off the precious metal to offset losses in equities. The focus shifted to liquidity considerations, with investors using assets like gold for margin coverage, in contrast to the appeal of discounted equities.  

On the 4-hour chart, gold is trading below the 9-day SMA, and resistance at Bollinger’s higher band at $2,783 and support near the 50-day SMA at $2,700 could be seen.

Gold prices in the UAE are as follows:
24 Carat – AED 332.00
22 Carat – AED 307.50
21 Carat – AED 297.75
18 Carat – AED 255.25

Last Updated on 3 days by News Desk 1