Chinese AI DeepSeek a 'Wake-Up Call' for U.S. Tech Firms, Donald Trump Says, After Nvidia’s World-Record $600 Billion Loss

Donald Trump has labeled China's new AI model, DeepSeek, a "wake-up call" for the US tech sector following Nvidia's staggering $600 billion market value loss.

DeepSeek's emergence triggered a sharp decline in AI-focused company stocks. Nvidia, a key player in the GPU market crucial for AI model operation, suffered the most significant blow, experiencing a 16.86% share plummet—a record on Wall Street. Microsoft, Meta Platforms, Alphabet (Google's parent company), and Dell Technologies also saw declines ranging from 2.1% to 8.7%.

DeepSeek boasts that its R1 model offers a significantly more affordable alternative to Western counterparts like ChatGPT. Leveraging the open-source DeepSeek-V3, it reportedly demands considerably less computing power than Western models, with an estimated training cost of just $6 million.

Although this claim faces some contention, DeepSeek has cast doubt on the billions invested by American tech giants in AI, unnerving investors. Its popularity surged, topping US download charts for free apps, fueled by growing discussions about its performance.

Sheldon Fernandez, co-founder of DarwinAI, commented to CBC News, stating that DeepSeek "performs as well as, and in some cases better than, leading Silicon Valley models, but using a fraction of the resources." He further highlighted the disruption to existing business models, noting the potential for free access to features previously requiring substantial monthly subscriptions.

President Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the US by potentially reducing development costs while achieving similar results. He emphasized the US's continued dominance in the AI field.

Despite DeepSeek's impact, Nvidia remains a $2.90 trillion company. The company is poised to release its highly anticipated RTX 5090 and RTX 5080 GPUs later this week, generating significant consumer demand.