China may be about to burst Silicon Valley's AI bubble — and Wall Street is freaking out.

U.S. tech stocks plunged on Monday, amid a wider market sell-off. The culprit: DeepSeek, a Chinese artificial intelligence company that last week introduced a new — and low-cost — model into the red-hot AI tech market.

DeepSeek on Monday morning became the most downloaded free app on Apple's U.S. app store — ousting OpenAI's ChatGPT in the process.

Shares of Nvidia, the chip company whose AI technology has made it into one of the world's most valuable companies, dropped more than 13 percent by late morning on Monday. Rival chip companies, including Arm and Broadcom, also plunged, dragging down the major indexes. The tech-heavy Nasdaq fell almost 600 points, or nearly 3 percent, by late morning.

Google, Microsoft, Apple, Meta and other big tech companies have poured billions of dollars into building up their artificial intelligence capabilities, fueling a Silicon Valley arms race. But now investors are calling these pricey investments into question: DeepSeek says it costs less to train its models, and its open-source AI assistant uses less advanced chips than rivals' models do.

At least investors will soon get to grill Big Tech companies about DeepSeek and their overall AI strategies. Four of what are often dubbed the Magnificent Seven tech stocks — Meta, Apple, Microsoft and Tesla — are due to report quarterly results this week.

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