The S&P 500 and the Nasdaq dropped on Monday, as the surging popularity of a low-cost Chinese artificial intelligence model knocked shares of chipmaker Nvidia and other companies benefiting from investments into the technology.

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.

Chinese startup DeepSeek has rolled out a free assistant it says uses lower-cost chips and less data, seemingly challenging a widespread bet in financial markets that AI will drive demand along a supply chain from chipmakers to data centers.