Chinese artificial intelligence (AI) start-up DeepSeek sent shares of major technology companies into a tailspin after it revealed a highly cost-effective AI model that was trained using limited resources but is competent enough to match the performance of more powerful and expensive models from the likes of OpenAI.

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

Big spending on GPUs from the hedge fund that spawned DeepSeek has some casting doubt on the company’s true expenditures while acknowledging innovation.