The tech giant suffered an 11% decline in China sales last quarter, raising concerns about its ability to fend off fierce competition in the country.

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Apple said that sales in China dropped in its latest quarter versus the prior year. Revenue in the Greater China segment fell to $18.5 billion in the first quarter, when analysts were expecting sales of $20.

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.

A major disruption hit the artificial intelligence sector this week as DeepSeek, a China-based chatbot, unveiled its latest AI models—trained for just $6 million. That’s a fraction of the cost U.S. companies typically spend,