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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.S. and China in developing AI technology. Part of what's worrying some U.S. tech industry observers is the idea that the Chinese startup has caught up with the American companies at the forefront of generative AI at a fraction of the cost. "The models they built are fantastic, but they aren't miracles either," said Bernstein analyst Stacy Rasgon, who follows the semiconductor industry and was one of several stock analysts describing Wall Street's reaction as overblown.

Shares of U.S. power, utility and natural gas companies sold off on Monday in some of the biggest recorded one-day drops, as new AI technology from Chinese start-up DeepSeek cast doubt on a projected surge in U.S. electricity demand and tech spending. Power producers were among the biggest winners in the S&P 500 last year on expectations of ballooning demand from the energy-guzzling data centers needed to scale Big Tech's artificial intelligence technologies. The wider adoption of AI models like the one developed by DeepSeek, which it says it built in under two months and is cheaper than models currently used by U.S. companies, could result in less electricity demand overall and result in a smaller power build-out, analysts and economists said.

Retired Intel CEO Pat Gelsinger said "the markets are getting it wrong" Monday after investors triggered a sell-off in response to China's DeepSeek.

KuCoin, one of the world's largest cryptocurrency exchanges, pleaded guilty on Monday to operating an unlicensed money transmitting business, and agreed to more than $297 million in fines and forfeiture, the U.S. Department of Justice said. Peken Global Ltd, which operates as KuCoin, entered its plea before U.S. District Judge Andrew Carter in Manhattan. Two KuCoin founders -- Chun Gan, known as Michael; and Ke Tang, known as Eric -- each agreed to enter two-year deferred prosecution agreements, forfeit $2.7 million, and cede any role in KuCoin's management and operations, the Justice Department said.

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The selloff could provide traders an attractive entry opportunity in higher-beta altcoins such as Solana's SOL, which endured a double-digit pullback, one analyst said.

The Nasdaq & S&P 500 fell after Chinese startup DeepSeek shows AI can be built cheaply, sparking fears AI spending will stall. The blue-chip Dow rose.

(Bloomberg) -- Wall Street had a rough start to the week on concern that a cheap artificial intelligence-model from Chinese startup DeepSeek could make valuations of the technology that has powered the bull market tough to justify. Most Read from BloombergTexas HOA Charged With Discrimination for Banning Section 8 RentersWhat Happened to Hanging Out on the Street?Budapest Mayor Aims to Block Orban’s Plans to Build ‘Mini Dubai’Vienna Embraces Heat Pumps to Ditch Russian GasBillionaire Developer C

A Chinese startup's promise of cheaper AI has rattled faith in the growth prospects for tech stocks.