Jan 28 (Reuters) - Australian stocks that are exposed to the artificial intelligence

wave fell sharply on Tuesday as investors feared the emergence of a low-cost AI model from

Chinese startup DeepSeek would threaten the dominance of current market leaders.

Shares of AI software firm Appen ( APPEF ) fell 3.3%, while AI chipmaker Brainchip ( BRCHF )

lost 10.3% by 0029 GMT. The technology sub-index was down 1%.

Last week, DeepSeek launched a free AI assistant that it says uses less data at a fraction

of the cost of incumbent services. By Monday, the assistant had surpassed U.S. rival ChatGPT in

downloads from Apple's ( AAPL ) app store.

The new model's sudden rise sent global technology stocks crashing overnight, with leader

Nvidia ( NVDA ) losing $592.7 billion in market capitalization, the biggest one-day loss for a

Wall Street stock, according to data compiled by LSEG.

In Australia, data centre landlords Goodman Group ( GMGSF ), NEXTDC ( NXDCF ) and DigiCo

Infrastructure REIT tumbled 6.4%, 6.2% and 11.1%, respectively, as DeepSeek's model

sparked concerns of lowered spending on infrastructure.

Australia's data-centre market saw outsized investment last year as the AI boom drove a

frenzied demand, with giants such as Nvidia ( NVDA ) pouring billions to build capacity.

"In our view, DeepSeek most likely drives further demand for data centers globally with

advanced computational capabilities, high capacity storage, robust networking, energy efficient

designs and infrastructure," analysts at Citi said in a note.

Jessica Amir, a market strategist at trading platform Moomoo, said she expects Australians

to reassess their exposure to AI and technology after the DeepSeek-induced selloff, and rotate

to safe havens such as healthcare and staples.