Cutting-edge new AI launches as US markets tumble

Investors have been rocked by a turbulent addition to the increasingly complex global economy: a blisteringly fast new AI that threatens to dethrone the rest.

The global economy has been spooked massively by two things — Donald Trump’s new tariffs and new AI tech in China.

Wall Street stocks tumbled overnight, extending a rough period as disappointment with Nvidia earnings and fresh tariff rhetoric from President Trump pressured the market.

While Nvidia reported impressive profits, shares finished down 8.5 per cent, with investors seemingly wanting more from the artificial intelligence company.

Investors have expressed fears that more efficient AI models coming from China’s ferociously competitive tech race would reduce chip demand.

“Investors have gotten used to having Nvidia blow the door off,” Jack Ablin of Cresset Capital said. “They did well but they didn’t blow the door off.”

Ablin also cited remarks from Mr Trump indicating that 25 per cent tariffs on Mexico and Canada would go into effect on Tuesday.

The Dow Jones Industrial Average finished down 0.5 per cent at 43,239.50. The broadbased S&P 500 dropped 1.6 per cent to 5,861.57, while the tech-rich Nasdaq Composite Index fell 2.8 per cent to 18,544.42.

Aussie shares have taken a hammering today too.

The ASX slipped as much as 1 per cent on Friday amid fears that higher tariffs on US imports from China could smash Australian commodities.

Australian iron ore and gold miners fell. BHP shed 2.1 per cent, Rio Tinto 2.6 per cent and Fortescue 2 per cent.

After shooting to records earlier this month, US indices have struggled in recent sessions following a trove of lacklustre economic data as Mr Trump presses on with assertive trade policy and government job cuts.

On Thursday, weekly jobless claims exceeded estimates, while pending home sales also disappointed.

Other AI companies fell, including Arm Holdings, which lost 6.2 per cent and Broadcom, which dropped 7.1 per cent.

Among individual companies, Salesforce fell 4.0 per cent on disappointment with the software company’s forecast eBay slumped 8.2 per cent as the company’s cautious financial outlook added to concerns about its exposure to tariff actions.

The broadbased S&P 500 has dropped in the past five days.

Analysts say Trump’s tariff talk has added to the turbulence. (Photo by Carl Court / POOL / AFP)

Blistering new Chinese AI rocks the boat

One of the most turbulent additions to the increasingly complex global economy this week was the launch of Chinese tech company Tencent’s blisteringly fast new AI.

The tech giant is touting Hunyuan Turbo S’s speed as its standout feature, positioning it as a nimble alternative to the deep reasoning approach favoured by DeepSeek’s renowned chatbot.

“Hunyuan Turbo S is designed to respond as instantly as possible,” Tencent said, highlighting not only the model’s quick response capabilities but also its reduced deployment costs.

The tech giant is touting Hunyuan Turbo S’s speed as its standout feature, positioning it as a nimble alternative to the deep reasoning approach favoured by DeepSeek’s renowned chatbot. (Photo by NOEL CELIS / AFP)

The launch follows closely on the heels of Alibaba Group Holding, which benchmarked its Qwen AI model against DeepSeek last month. The comparison underscores DeepSeek’s swift rise to industry influence, a remarkable achievement for a start-up that only emerged in early 2025.

Tencent shared performance metrics showing its Hunyuan Turbo S competing closely with DeepSeek’s V3 model in widely recognised AI benchmarks, aiming to position itself as a formidable contender in the sector.

As one of China’s leading cloud infrastructure providers alongside Alibaba, Tencent is weaving DeepSeek’s technology into its WeChat platform.

The move has already boosted Tencent’s share price and signals growing market confidence. DeepSeek’s influence has also expanded into government operations across China, including Hong Kong, where several departments are now adopting ChatGPT-style tools based on its technology.

In a bid to handle surging demand, DeepSeek announced a price cut for accessing its application programming interface during off-peak hours.

Earlier this month, Chief Executive Craig Scroggie claimed it was “no surprise” China is producing an AI model with “extraordinary capabilities”.

“As the technology continues to improve, we will use more of it,” Mr Scroggie told Sky News Business Editor Ross Greenwood.