Trump: Chinese AI DeepSeek a 'Wake-Up Call' for U.S. Tech After Nvidia's $600B Loss

Donald Trump has labeled the new Chinese artificial intelligence model, DeepSeek, as a "wake-up call" for the U.S. tech industry, following a significant $600 billion drop in Nvidia's market value. The launch of DeepSeek has triggered a sharp decline in the stock prices of companies deeply involved in AI technology. Nvidia, a leader in the GPU market crucial for AI operations, experienced a historic 16.86% plummet in its share value, marking the largest single-day loss in Wall Street history.

Other tech giants like Microsoft, Meta Platforms, and Google's parent company Alphabet saw their shares decrease by 2.1% to 4.2%, while Dell Technologies, known for its AI servers, dropped by 8.7%.

DeepSeek's R1 model is touted as a more affordable alternative to Western AI solutions like ChatGPT. Built on the open-source DeepSeek-V3, it reportedly uses less computing power and was trained for an estimated $6 million. While some challenge these claims, DeepSeek's impact has raised questions about the massive AI investments by American tech companies, causing investor unease. The app's popularity surged, topping the U.S. free app download charts amidst discussions of its efficacy.

Sheldon Fernandez, co-founder of DarwinAI, told CBC News, "[DeepSeek] performs as well as the leading models in Silicon Valley and in some cases, according to their claims, even better. But they did it with a fractional amount of the resources, which is really what is turning heads in our industry. Instead of paying Open $20 a month or $200 a month for the latest advanced versions of these models, [people] can really get these types of features for free. And so it really upends a lot of the business model that a lot of these companies were relying on to justify their very high valuations."

Despite the market turmoil, President Trump views DeepSeek's emergence positively, suggesting it could benefit the U.S. by reducing costs. "Instead of spending billions and billions, you'll spend less and you'll come up with hopefully the same solution," he remarked, as reported by the BBC. "If you could do it cheaper, if you could do it [for] less [and] get to the same end result, I think that's a good thing for us," Trump added, emphasizing that the U.S. would maintain its dominance in AI.

Nvidia, despite the significant hit to its market value, remains a powerhouse with a valuation of $2.90 trillion. The company is poised to launch the eagerly awaited RTX 5090 and RTX 5080 GPUs this week, with enthusiasts braving the January cold to camp outside stores in anticipation.