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

The Nasdaq Composite, which tracks the country’s largest tech firms, plunged 3.4% at the opening bell. The Dow fell 180 points and the S&P 500 tumbled nearly 2%.

The sell off was sparked by advances claimed by China’s DeepSeek, which released an open-source artificial intelligence model in December, after saying that it took only two months and less than $6 million to create. Those claims would be far less than the hundreds of billions of dollars that American tech giants like OpenAI, Microsoft, Meta and others have poured into developing their own models, fueling fears that China may be passing the U.S. in the scale and efficiency of their AI investments.

DeepSeek’s app is now the number one free app in the Apple App Store, pushing OpenAI’s ChatGPT into second place.

Among the biggest losers in the stock market slump: chipmaker Nvidia, where shares plummeted more than 12%. Nvidia has been among the better performers as of late, with shares soaring more than 200% over the course of the last two years making it one of the largest companies in the world. Nvidia’s drop would wipe more than $300 billion in market value off the company. Other semiconductor companies also saw major losses. Micron Technology and Arm Holdings fell 7% while ASML slid 9%.

Mega-cap tech firms also felt the pain, with Microsoft and Google parent Alphabet falling 4%. Meta Platforms, which is developing its own open-source AI model, fell nearly 2%.

Worries about DeepSeek’s alleged advances come despite export controls on sales of advanced semiconductors to China.

Constellation Energy, which inked a deal with Microsoft to restart the Three Mile Island nuclear plant to power artificial intelligence servers, sank 16%. Shares of other power companies seen as AI beneficiaries such as Vistra Energy and NRG Energy also dropped sharply. Siemens Energy, which makes equipment for utility companies, plunged 20%. GE Vernova, another maker of power equipment, fell more than 23%.

Not everyone is convinced by DeepSeek’s announcements. “We believe that…DeepSeek did not ‘build OpenAI for $5M'”, Bernstein analyst Stacy Rasgon wrote in a note to clients Monday. “The models look fantastic but we don’t think they are miracles.”

Giuseppe Sette, a president at AI market research firm Reflexivity, said the underlying tech for DeepSeek appears to be “extremely bullish in the long-term” because it could be a playbook for other AI firms going forward.

“DeepSeek has taken the market by storm by doing more with less. In layman terms, they activate only the most relevant portions of their model for each query, and that saves money and computation power. This shows that with AI the surprises will keep on coming in the next few years,” Sette wrote in a note Monday.