Shares of semiconductor makers were dropping early Monday as a Chinese AI model triggered questions over their lofty valuations.

According to a paper authored by the lab, the DeepSeek-R1 model outperforms cutting-edge models such as OpenAI’s o1 and Meta’s Llama AI models across multiple benchmarks.

The Monday market opening triggered an 12% slide in Nvidia (NVDA, Financial) stock due to investors' growing doubt about major investments in AI technology following China's DeepSeek R1 AI system launch.