U.S. equity markets are set to open deep in the red as investors begin to digest the significance of DeepSeek’s AI reasoning model R1.

DeepSeek’s low-cost innovation could reshape how AI models are developed, challenging industry norms and igniting a global conversation about the accessibility of high-performance AI.

By Amanda Cooper and Ankur Banerjee LONDON/SINGAPORE (Reuters) -Investors hammered technology stocks on Monday, sending the likes of Nvidia and Oracle plummeting, as the emergence of a low-cost Chinese artificial intelligence model cast doubts on dominance of U.

The start-up had become a key player in the “Chinese Large-Model Technology Avengers Team” that would counter US AI dominance, said another. China’s delight, however, spelled pain for several giant US technology companies as investors questioned whether DeepSeek’s breakthrough undermined the case for their colossal spending on AI infrastructure.

Top White House advisers this week expressed alarm that China's DeepSeek may have benefited from a method that allegedly piggybacks off the advances of U.S. rivals called "distillation." The technique,