Asia Equities Slide With U.S. Stock Futures Amid China's AI Push

U.S. stock futures and Asian shares outside China slumped on Monday as investors considered the implications of Chinese startup DeepSeek's launch of a free, open-source artificial intelligence (AI) model to rival OpenAI's ChatGPT, Kevin Buckland reported for Reuters.

China has proven it can continue to make strides in the AI race despite U.S. restrictions.

Nasdaq Composite futures in the U.S. tumbled 1.8% as of 01:58 GMT, and S&P 500 futures sank 0.9%. Japan's Nikkei fell 0.3%, reversing an earlier advance. New Zealand's equity benchmark slipped 0.6%, while Singapore's Straits Times Index declined 0.2%.

Meanwhile, Hong Kong's Hang Seng Index rallied 0.9%, and mainland blue-chip stocks gained 0.2%, even after data revealed a surprising contraction in manufacturing this month.

DeepSeek "has raised the specter of disruption in the tech landscape, with its emergence suggesting that China can continue to make strides in the AI race despite U.S. restrictions," Yeap Jun Rong, a strategist at IG, wrote in a note.

It "seems to instill some concerns over U.S. tech dominance," putting "tech companies' lofty valuations back under scrutiny," he added.