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.

Nvidia closed higher on Tuesday as some investors seized an opportunity to buy the chip giant at a discount following its record wipeout on Monday.

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.

The startup has said its models either match or outperform rivals at a fraction of the cost, challenging the view that AI requires vast investment.

US President Donald Trump has called Chinese AI start-up DeepSeek's strong showing a "wake-up call" and "positive" for America's tech sector, and also warned that he would slap tariffs on foreign-made semiconductor chips,

The U.S. tried to slow China’s advances, but the startup showed how hard that is.

The artificial intelligence boom is a two-edged sword for $290 billion ASML . Shares in the Dutch maker of lithograph machines used to make chips soared by 8% on Wednesday thanks to booming demand from semiconductor manufacturers such as TSMC .

ASML Holding NV’s orders in the fourth quarter beat estimates as the artificial intelligence boom drove demand for its chipmaking machines, potentially easing concerns sparked by Chinese startup DeepSeek.

Dutch semiconductor equipment maker ASML on Wednesday reported better-than-expected net sales and profit results for the fourth quarter.