AI could raise productivity growth from 0.8 to 1.5 percentage points a year. That rivals the boosts we got from the transcontinental railroads, mechanization of agriculture and interstate highway system.

The S&P 500 fell 1.9% Monday. Big Tech stocks took some of the heaviest losses, with Nvidia down 17.6%, and they dragged the Nasdaq composite down 3.3%.

The S&P 500 was down 1.6% in morning trading. Big Tech stocks took some of the heaviest losses, with Nvidia down 11.2%, and they dragged the Nasdaq composite down 2.7%. The Dow Jones Industrial Average, which has less of an emphasis on tech, was holding up better with a dip of 123 points, or 0.3%, as of 9:50 a.m. Eastern time.

European tech shares came under pressure on Monday, after Chinese tech startup DeepSeek's low-cost artificial intelligence model sparked worries about returns in the AI business and the need for costly chips.

Affordable, DeepSeek in China competes with AI models from US tech giants Meta (META, Financial) and OpenAI while offering the same performance. Investors were becoming concerned about traditional AI development spending by The Magnificent 7 when they were told DeepSeek was joining the AI market.

Wall Street is tumbling on fears the big U.S. companies that have feasted on the artificial-intelligence frenzy are under threat from a competitor in China.

Global equity funds gained a fourth weekly inflow in five weeks in the week through Jan. 22 spurred by optimism for U.S. Federal Reserve rate cuts following cooling inflation and President Donald Trump's plans for extensive AI infrastructure spending.

Wall Street’s superstars are tumbling as a competitor from China threatens to upend the artificial-intelligence frenzy they’ve been feasting on.

(Reuters) -Wall Street was set to drop at the open on Monday, as the surging popularity of a low-cost Chinese artificial intelligence model sparked a selloff in chipmaker Nvidia and other companies that stand to benefit from investments into the technology.

British equities gave a muted opening on Monday, with industrial metal miners pulling the FTSE 100 down by 0.2%, as investors anticipate the Federal Reserve’s rate decision. The FTSE 250 lost 0.6%, impacted by popular low-cost Chinese AI models,

The tech-heavy Nasdaq Composite ( ^IXIC) sank nearly 3.5%, while the S&P 500 ( ^GSPC) dropped nearly 2%. The blue-chip Dow Jones Industrial Average ( ^DJI ), which is less dependent tech stocks, bucked the trend, rising 0.1%.