DeepSeek's emergence is shaking up investor confidence of the AI story that has been lifting the U.S. bull market in the past two years.

Nasdaq posted its biggest one-day percentage drop since Dec. 18 on Monday as a low-cost Chinese artificial intelligence model prompted a steep selloff in U.S. chipmakers.

Nvidia shares closed down almost 17%, posting its biggest drop since March 2020 and erasing nearly $600 billion from the company's market cap. Broadcom fell 17.4%, and other chip stocks like Micron declined 11.