LONDON, Jan 28 — Japanese tech firms sank Tuesday following a rout on Wall Street after China’s DeepSeek chatbot upended the artificial intelligence sector and sparked questions about huge investments by US titans.
The dollar rallied on a report saying Washington was considering universal tariffs on a range of goods, fanning fresh fears about a trade war.
Other Asian equity indices ended mixed in limited trade ahead of the Lunar New Year break.
European stock markets rose in morning deals and oil prices advanced, as traders awaited interest-rate decisions from the US Federal Reserve and European Central Bank due this week.
Tokyo-listed companies linked to the artificial intelligence sector tanked for a second straight day as investors tracked a rout on Wall Street that saw Nvidia crumble 17 per cent, wiping more than half-a-trillion dollars off its market capitalisation.
The retreat came after DeepSeek unveiled its R1 chatbot, which has apparently shown the ability to match the capacity of US AI pace-setters for a fraction of the investments made by American companies.
“The DeepSeek news has triggered a rethink on the AI revolution and arguably one of the pillars of the current US exceptionalism,” said Rodrigo Catril, foreign exchange strategist at National Australia Bank.
“If R1 is as good as first impressions seem to suggest, then demand for sophisticated chips, infrastructure (think data centres) and energy may not be as large as originally thought.”
Nvidia has been the standout company that has led the drive by investors to seek out all things AI, spending vast sums of cash but seeing their share prices rocket.
The US chip firm has piled on about 1,900 per cent in five years.
The DeepSeek bombshell also came on the heels of President Donald Trump’s announcement of a new US$500 billion (RM2.2 trillion) venture to build infrastructure for artificial intelligence in the United States.
Trump said the release of DeepSeek’s model “should be a wake-up call for our industries that we need to be laser-focused on competing to win”.
He argued that it could be a “positive” for US tech giants.
“Instead of spending billions and billions, you’ll spend less, and you’ll come up with hopefully the same solution,” he said.
Sam Altman, the boss of OpenAI, which runs lead US chatbot ChatGPT, called DeepSeek “impressive”.
Wall Street’s Nasdaq index filled with tech stocks tanked more than three per cent and the S&P 500 more than one per cent Monday, with another US chip-maker, Broadcom, off 17.4 per cent.
The selling in Tokyo extended into Tuesday, with the Nikkei ending down 1.4 per cent.
In the semiconductor sector, Advantest plunged more than 11 per cent, while Tokyo Electron shed 5.7 five per cent and Disco Corporation almost three per cent.
Tech investor SoftBank, which is a key investor in Trump’s AI project, tumbled more than five per cent, having lost more than eight per cent the day before.
Greenback rally
The dollar pushed higher after the Financial Times reported that US Treasury Secretary Scott Bessent was looking to impose universal tariffs of 2.5 per cent on goods initially and lifting them by the same amount each month.
It said the move would give room for negotiations with the White House but the tariffs could go as high as 20 per cent.
The report comes after Trump rattled confidence Sunday by a row with Colombia over deportations, in which the president said he would hit the country with 25 per cent levies.
Bogota backed down after a short standoff, but analysts said the development highlighted the president’s willingness to weaponise tariffs. — AFP
