Technology stocks were hit hard on Monday as traders reacted to the unveiling of an artificial-intelligence model from China that investors fear could threaten the dominance of some of the largest US players.

Beyond the single-day moves in the tech space, the emergence of China's DeepSeek startup is challenging the very foundation of the record-setting stock market. The sell-off has ensnared megacap giants such as Nvidia and Microsoft, which are heavily weighted in US indexes. Any weakness in them makes the overall market more fragile.

Most notably, DeepSeek's AI model — which was trained on less advanced, cheaper Nvidia chips — has challenged Wall Street's decision to view massive AI spending as a positive, a mentality that's fueled sky-high valuations. Heading into 2025, Amazon, Google, Meta, and Microsoft were expected to churn through $300 billion in capital expenditure over the year.

DeepSeek started roiling equity futures over the weekend, and the rout continued on Monday as it hit No. 1 in Apple's App Store, surpassing ChatGPT.

The tech-heavy Nasdaq 100 dropped as much as 3.6%, with semiconductors and the most popular names of the AI trade seeing the deepest losses. The S&P 500 lost 2.3% at intraday lows, and the Dow Jones Industrial Average lost as many as 398 points.

Here are some of the top tech names that were selling off on Monday morning. The listed moves are intraday lows:

Oracle and SoftBank, which were part of a $500 billion deal President Donald Trump announced last week to build more AI infrastructure, also dropped. Oracle shares were down as much as 9%, while SoftBank shares were down 8% after Tokyo's stock exchange closed on Monday.

"What makes Monday's tech sell-off so jarring is that the valuations of many of these AI and tech companies offer no margin of error. Excessive valuation always becomes a problem, eventually, but fundamental news becomes a heightened problem when it is combined with excessive valuation," David Bahnsen, the chief investment officer of the Bahnsen Group, wrote in a note on Monday.

"DeepSeek is a word you've heard all weekend, and you'll hear all day today," Jeff Kilburg, the CEO of KKM Financial, told CNBC on Monday. "This could be the pin that pops the Mag Seven bubble."