DeepSeek released an open-source artificial intelligence model in December, saying it took only two months and less than $6 million to create it.

Japanese technology shares fell on Tuesday as a global market rout sparked by the emergence of a low-cost Chinese artificial intelligence model entered day two, with investors questioning the sky-high valuation and dominance of AI bellwethers.

Silicon Valley and Washington leaders said the app shows China can challenge the U.S. The Nasdaq lost 3 percent and chipmaker Nvidia shed $589 billion in market capitalization.

Some AI researchers hailed DeepSeek’s R1 as a breakthrough on the same level as DeepMind’s AlphaZero, a 2017 model that became superhuman at the board games Chess and Go by purely playing against itself and improving, rather than observing any human games.

A frenzy over an artificial intelligence chatbot made by Chinese tech startup DeepSeek was upending stock markets Monday and fueling debates over the economic and geopolitical competition between the U.