Nvidia shares' 9% recovery Tuesday was the second-best day in terms of market cap added for any company ever—but the company faced another selloff Wednesday.

Chip stocks in the U.S. and Europe rose on Wednesday for a second straight day, recovering from a punishing selloff triggered by China's low-cost DeepSeek artificial intelligence tool at the start of the week.

U.S.-listed shares of tech giants are gaining some lost ground this morning after a China-based startup shocked the AI world with a powerful LLM. Yesterday, shockwaves rippled across the American tech industry after news spread over the weekend about a powerful new large language model (LLM) from China called DeepSeek.

China’s DeepSeek says it trained an AI model for less than $6 million. This is as big U.S. tech companies have poured billions of dollars into AI chips and systems for their projects.

DeepSeek's new AI model has sparked concerns about Nvidia's dominance in the AI hardware market, causing a drop in the chipmaker's stock and raising questions about the future of high-performance AI chips.

Global investors are worried the emergence of a low-cost Chinese AI model will threaten the dominance of AI leaders.