Shares of chipmaker Nvidia plunged Monday, for its worst day since the global market sell-off in March 2020 triggered by the coronavirus pandemic.

US tech giant Nvidia lost over a sixth of its value after the surging popularity of a Chinese artificial intelligence (AI) app spooked investors in the US and Europe. DeepSeek, a Chinese AI chatbot reportedly made at a fraction of the cost of its rivals, launched last week but has already become the the most downloaded free app in the US.

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.

The Chinese AI service has Wall Street worried that it will be cheaper than expected to develop models. But as chip stocks sink, some analysts see a silver lining.

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.