US stocks dropped sharply Monday morning after a surprise advancement from a Chinese artificial intelligence company, DeepSeek, threatened the aura of invincibility surrounding America’s technology industry.

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%.

DeepSeek's new AI model has sparked concerns about Nvidia's dominance in the AI hardware market, causing a drop in the chipmaker's stock and raising questions about the future of high-performance AI chips.

DeepSeek released an open-source artificial intelligence model in December after saying that it took only two months and less than $6 million to create.

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In a matter of days, DeepSeek proved to be so popular as to climb to the top of Apple's App Store, surpassing OpenAI's ChatGPT as the most downloaded app. But for owners of Nvidia stock, and stock traders in general, DeepSeek is on track of becoming a black swan — an unexpected event with extreme consequences.