Global chip stocks slumped Monday on DeepSeek revealing it had developed AI models that nearly matched American rivals despite using inferior chips.

DeepSeek topped the Apple App Store chart and sparked fears the Chinese company was quickly catching up with OpenAI's ChatGPT while costing far less.

The tech-heavy Nasdaq index lost nearly 4 percent in early trading Monday, with chipmaker Nvidia down nearly 12 percent.

U.S. tech stocks, including Nvidia, Oracle and Google, plummeted Monday after Chinese startup DeepSeek said it created an AI system that can compete against chatbots such as OpenAI's ChatGPT at much lower costs.

Shares in major US technology firms have plunged after the rapid rise of a low-cost chatbot built by a Chinese artificial intelligence (AI) firm. The DeepSeek app, which was launched last week, has overtaken rivals including OpenAI's ChatGPT to become the most downloaded free app in the US.