The Truth Behind Semiconductor Stock Downturns Caused by Chinese AI Models

Chinese AI startups are increasingly challenging global leaders OpenAI and Anthropic, with models like DeepSeek V4 and Z.ai's GLM 5.2 gaining traction. These models, offering competitive performance at lower costs, have significantly impacted semiconductor stocks, causing sharp declines in companies like NVIDIA and Micron. The scale of disruption mirrors past AI shocks but with broader effects, as open-source models like DeepSeek's K3, with 28 billion parameters, now rival closed-source counterparts. Despite strong quarterly results from TSMC and ASML, the market remains in freefall, highlighting the transformative impact of Chinese AI on the semiconductor industry.