Japanese tech firms sank yesterday following a rout on Wall Street after China’s DeepSeek (深度求索) chatbot upended the artificial intelligence (AI) sector and sparked questions about huge investments by US titans.
The US dollar rallied on a report saying Washington was considering universal tariffs on a range of goods, fanning fresh fears about a trade war.
Tokyo-listed companies linked to the AI sector tanked for a second straight day as investors tracked a rout on Wall Street that saw Nvidia Corp crumble 17 percent, wiping more than half a trillion dollars off its market capitalization.
Photo: Bloomberg
The retreat came after DeepSeek unveiled its R1 chatbot, that has apparently shown the ability to match the capacity of US AI pace-setters for a fraction of the investments made by US companies.
OpenAI chief executive officer Sam Altman, whose firm runs the lead US chatbot ChatGPT, called DeepSeek “impressive.”
The NASDAQ tanked more than 3 percent and the S&P 500 more than 1 percent, with another US chipmaker, Broadcom Inc, off 17.4 percent.
The selling in Tokyo extended into yesterday, with the Nikkei off 1.4 percent. Advantest Corp plunged more than 11 percent, while Tokyo Electron Ltd shed 5.7 five percent and Disco Corp almost 3 percent.
Tech investor Softbank Group Corp, which is a key investor in Trump’s US$500 billion AI project, tumbled more than 5 percent, having lost more than 8 percent the day before.
“The DeepSeek news has triggered a rethink on the AI revolution and arguably one of the pillars of the current US exceptionalism,” National Australia Bank analyst Rodrigo Catril said. “If R1 is as good as first impressions seem to suggest, then demand for sophisticated chips, infrastructure (think data centres) and energy may not be as large as originally thought.”
Other Asian markets were mixed in limited trade ahead of the Lunar New Year break.
Hong Kong, Singapore and Mumbai rose, though Sydney, Wellington, Manila and Bangkok dipped with Sydney barely moved.
Shanghai, Jakarta, Seoul and Taipei were closed.
The US dollar pushed higher after the Financial Times reported that US Secretary of the Treasury Scott Bessent was looking to impose universal tariffs of 2.5 percent on goods initially and lifting them by the same amount each month. It said the move would give room for negotiations with the White House, but the tariffs could go as high as 20 percent.
The greenback rallied against the yen, euro and sterling, while the Mexican peso and South African rand were off more than 1 percent each.
Investors are also looking ahead to the US Federal Reserve’s policy meeting later this week, with hopes it will offer a fresh view of its interest rate outlook in light of Trump’s tariff warnings and pledges to slash taxes, immigration and regulations.
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