The S&P 500 and the Nasdaq fell sharply on Monday, led by Nvidia and other chipmakers as popularity of a low-cost Chinese artificial intelligence model raised investor worries about the outlooks for current AI leaders in the United States.

Nvidia shares closed down almost 17%, posting its biggest drop since March 2020 and erasing nearly $600 billion from the company's market cap. Broadcom fell 17.4%, and other chip stocks like Micron declined 11.

Nvidia crossed below its 200 day moving average for the first time since 2023 this week. Analysts say the correction could deepen.

A new Chinese AI model threatens to diminish the need for Nvidia’s most-expensive chips, but some say the concerns are overblown.