DeepSeek's In-House Chip Push Sends Intel, Nvidia, AMD, Micron and Sandisk Plunging Up To 14%

US semiconductor stocks took a severe beating after Chinese AI company DeepSeek announced it is developing its own in-house chips, directly threatening the dominance of American chipmakers. Intel, Nvidia, AMD, Micron and Sandisk each plunged up to 14%, triggering a broad sell-off in global tech markets and putting the Nasdaq on course for a sharply lower open.

The market reaction reflects deep investor concern that DeepSeek — already known for building powerful AI models at a fraction of Western costs — could reduce or eliminate its dependence on US-designed chips. For companies like Nvidia, whose valuations rest heavily on AI data-centre demand, any sign that a major AI lab could bypass their hardware is a fundamental threat to the growth story.

The rout also weighed on global market sentiment more broadly. Oil prices jumped and the dollar firmed on the same day, underlining a sharp rotation away from high-growth tech into more defensive assets. Analysts noted that DeepSeek's emergence has repeatedly shocked markets by demonstrating that AI capability does not necessarily require the most expensive chips.

For India, the ripple effects are significant. Indian IT majors and semiconductor design firms with heavy exposure to US tech-sector clients could face volatility, even as some analysts argue that cheaper AI infrastructure could ultimately benefit Indian technology adopters. The episode underscores how a single announcement from a Chinese AI lab can instantly reshape the global semiconductor landscape.