Celestica Inc. (CLS) shares plummeted over 22% in the intraday trading session on Monday, underperforming the broader market. The steep decline came as the tech sector was rattled by the emergence of DeepSeek, a low-cost AI model from China that challenges the conventional thought that companies like Celestica need expensive, cutting-edge computer chips and massive energy supplies for AI applications.

The Canadian-American supply-chain solutions company has been leaning into AI for various applications, including energy delivery and improving predictions on its platform. One of its key products, the DS5000 switch, is a networking device designed for modern data centers to meet the growing use of AI technology.

Unlike many Western rivals, DeepSeek claims to use less-advanced chips combined with innovative model-training methods, potentially disrupting the high-cost investment in the sector. This development has raised concerns about Celestica's exposure to AI-related capital expenditures and its ability to continue gaining market share in the rapidly evolving AI landscape.