Stock markets fell sharply on Monday, dragged down by fears that advances in artificial intelligence by Chinese upstarts could threaten the moneymaking power of American technology giants.

The Chinese A.I. company DeepSeek has made waves by matching the capabilities of cutting-edge chatbots while using a fraction of the specialized computer chips that leading A.I. companies rely on. That has made investors rethink the large returns they are expecting on the heady valuations of chipmakers like Nvidia, whose equipment powers the most advanced A.I. systems, as well as the investments that companies like Google, Meta and OpenAI are making to build their A.I. businesses.

Premarket trading implied steep declines for U.S. markets when they open, with futures for the S&P 500 slumping more than 2 percent and the tech-heavy Nasdaq dropping more than 4 percent.

The pain was concentrated at companies at the forefront of the A.I. boom, including the multitrillion-dollar behemoths that drove the largest back-to-back annual gains for U.S. markets since the 1990s.

Nvidia was down more than 10 percent in premarket trading, a move that erases hundreds of billions of dollars in market value. Other chipmakers like AMD and semiconductor equipment specialists like ASML recorded similar declines.

“Even if DeepSeek does not maintain its current level of popularity, this development serves as a reminder that competition in the global A.I. arena is intensifying, and Nvidia may not be in the pole position forever,” Charu Chanana, chief investment strategist at Saxo Bank, wrote in a research note.