Advances in artificial intelligence by Chinese upstarts rattled U.S. markets on Monday, with the threat of greater competition prompting a slide in shares of the biggest technology companies.

The Chinese A.I. company DeepSeek has said it can match the abilities of cutting-edge chatbots while using a fraction of the specialized computer chips that leading A.I. companies rely on. That’s prompted investors to rethink the heady valuations of companies like Nvidia, whose equipment powers the most advanced A.I. systems, as well as the enormous investments that companies like Alphabet, Meta and OpenAI are making to build their businesses.

On Monday, the S&P 500 index fell 1.5 percent, and the tech-heavy Nasdaq dropped 3.1 percent. Nvidia was hit hard, plunging 16.9 percent and losing roughly $600 billion in market value. Falling tech stocks also dented market indexes in Europe and Japan.

Excitement over the prospects for A.I. had helped send technology stocks soaring over the past year, but concerns have been rising, too. Investors have become increasingly worried that the small cohort of tech companies that drove the broader market’s gains won’t live up to the lofty expectations that their sky-high prices suggest.

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. Alphabet and Microsoft fell, and in addition to Nvidia, other chipmakers like Arm, Broadcom and Micron, and semiconductor equipment specialists like ASML slid.