Monday saw Taiwan Semiconductor Manufacturing Company ( TSM , Financial ) stock dip 10% with other chip stocks as loan trading in chipmakers accelerated after DeepSeek's Chinese artificial intelligence model debut. Nasdaq 100, which is becoming more technology-focused, is on course for its worst day since 2022 amid concerns that DeepSeek's innovative AI technology could revolutionize the way artificial intelligence is used around the world.

Affordable, DeepSeek in China competes with AI models from US tech giants Meta (META, Financial) and OpenAI while offering the same performance. Investors were becoming concerned about traditional AI development spending by The Magnificent 7 when they were told DeepSeek was joining the AI market. However, analysts have raised doubts about whether some of its largest financial outlays can continue and whether they will hold down future profitability levels.

While the tech market correction sees negative sentiment from all the sectors, the S&P 500 and Dow Jones Industrial Average experience the same as well. Analysts say the market correction could be so deep that investors will shift money from Treasury yields and exchange rates toward safe assets. DeepSeek entering AI will be a sign of serious competitive change in the technology industry, and the Federal Reserve will bear closely watching the market reaction.

This article first appeared on GuruFocus .