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.

With Monday’s losses, Apple has retaken the title of world’s most valuable company and Nvidia’s value sank to around $2.8 trillion.

US chip-maker Nvidia led a rout in tech stocks Monday after the emergence of a low-cost Chinese generative AI model that could threaten American dominance in the fast-growing industry.

Nvidia Corp., the biggest provider of chips used to train artificial intelligence software, said a new model released by Chinese startup DeepSeek is an “excellent AI advancement” that complies with US technology export controls.

Nvidia on Monday said Chinese AI firm DeepSeek's advances show the usefulness of its chips for the Chinese market and that more of its chips will be needed in the future to meet demand for DeepSeek's services.