Tech stocks plunged Monday morning, as fears mounted that Chinese artificial intelligence firm DeepSeek leapfrogged U.S. dominance in AI development.

Global chip stocks slumped Monday on DeepSeek revealing it had developed AI models that nearly matched American rivals despite using inferior chips.

DeepSeek topped the Apple App Store chart and sparked fears the Chinese company was quickly catching up with OpenAI's ChatGPT while costing far less.

Silicon Valley and Washington leaders said the app shows China can challenge the U.S. The Nasdaq lost 3 percent and chipmaker Nvidia shed $589 billion in market capitalization.

People across China have taken to social media to hail the success of its homegrown tech startup DeepSeek and its founder, after the company unveiled its newest artificial intelligence model, sending shock waves through Silicon Valley and Wall Street.