The success of Chinese AI startup DeepSeek sent the stocks of Nvidia and other chipmakers plunging on Monday, but when the bloodbath was over, most of America’s other tech giants and big software names emerged unscathed. In fact, DeepSeek’s apparent breakthroughs could be good news for software names like Salesforce, ServiceNow, and HubSpot, which have all seen their shares surge this week, as well as cloud titan Microsoft.
The market turmoil came after DeepSeek unveiled an AI tool that appears capable of competing with those created by top U.S. companies, but at a fraction of the cost. The development calls into question the wisdom of the massive AI spending wave that has swept through Silicon Valley in recent years. Analysts at Bank of America, however, say that lower costs to run AI models will benefit the software sector, which could also accelerate investment throughout the broader tech ecosystem.
