On January 28, 2025, US technology stocks experienced a partial recovery after a significant selloff triggered by Chinese startup DeepSeek's introduction of an advanced and cost-effective artificial intelligence (AI) model.

Nvidia, a leading AI chip manufacturer, saw its shares increase by 8.9% on Tuesday, following a 17% decline the previous day.

Similarly, Marvell Technology and Broadcom reported gains of 3.5% and 2.6%, respectively, after substantial losses on Monday.

DeepSeek's new AI model has been recognized for its efficiency, performing tasks comparable to those of existing models but at a fraction of the computing cost.

This development has prompted discussions about the potential impact on the AI industry and the competitive landscape between the US and China.

However, skepticism remains regarding DeepSeek's cost claims and its ability to rival established AI firms.

The broader technology sector also showed signs of recovery, with the Philadelphia semiconductor index rising by 1.1% on Tuesday after a 9.2% decline on Monday.

Major technology firms, including Apple and Microsoft, contributed to the rebound, with Apple shares increasing by 3.7% and Microsoft shares by 2.9%.

Despite the recovery, analysts suggest that the emergence of more efficient AI models like DeepSeek's may lead investors to reassess valuations of AI-related stocks.

The situation underscores the dynamic nature of the AI industry and the ongoing competition between global tech companies.