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

Former President 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 emergence of DeepSeek has triggered a sharp decline in stocks of companies deeply invested in artificial intelligence, with Nvidia experiencing the most severe impact as its shares plummeted by 16.86%—marking the largest single-day loss in Wall Street history.

Other tech giants were also affected, with Microsoft, Meta Platforms, and Google's parent company Alphabet seeing their stocks fall between 2.1% and 4.2%. AI server manufacturer Dell Technologies faced an 8.7% drop. This market turbulence underscores the disruptive potential of DeepSeek in the ongoing AI gold rush.

DeepSeek has sent shockwaves throughout the AI gold rush. Photo by NICOLAS TUCAT/AFP via Getty Images.

DeepSeek's R1 model is touted as a cost-effective alternative to Western AI offerings like ChatGPT. Built on the open-source DeepSeek-V3, it reportedly demands significantly less computing power and was trained for an estimated $6 million. Although some dispute these claims, DeepSeek's impact has raised questions about the massive AI investments by American tech firms, causing investor unease. The model's rising popularity led it to top the U.S. free app download charts.

Sheldon Fernandez, co-founder of DarwinAI, highlighted DeepSeek's impressive performance, stating to 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." Fernandez noted that DeepSeek's affordability could disrupt the business models of companies charging high fees for similar services.

Despite the market upheaval, Trump suggested that DeepSeek could have positive implications for the U.S., as reported by the BBC. He remarked, "Instead of spending billions and billions, you'll spend less and you'll come up with hopefully the same solution. 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 emphasized that the U.S. would maintain its dominance in AI.

Despite the impact of DeepSeek, Nvidia remains a formidable $2.90 trillion company. The anticipation surrounding the release of their RTX 5090 and RTX 5080 GPUs is evident, with enthusiasts braving the January cold to camp outside stores in hopes of purchasing these highly sought-after cards.