Japanese technology shares fell on Tuesday as a global market rout sparked by the emergence of a low-cost Chinese artificial intelligence model entered day two, with investors questioning the sky-high valuation and dominance of AI bellwethers.

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

Silicon Valley and Washington leaders said the app shows China can challenge the U.S. The Nasdaq lost 3 percent and chipmaker Nvidia shed $589 billion in market capitalization.