Donald Trump has labeled the new Chinese AI model, DeepSeek, a "wake-up call" for the U.S. tech sector following Nvidia's staggering $600 billion market value loss.
DeepSeek's emergence triggered a sharp decline in AI-heavy company stocks. Nvidia, a GPU market leader crucial for AI model operation, suffered the most, experiencing a 16.86% share plunge—a record on Wall Street. Microsoft, Meta Platforms, Alphabet (Google's parent company), and Dell Technologies also saw significant drops, ranging from 2.1% to 8.7%.
Although this claim is contested, DeepSeek challenges the billions invested by American tech firms in AI, unsettling investors. Its popularity surged, reaching the top of U.S. free app download charts amidst growing discussions about its efficacy.
"DeepSeek performs comparably to leading Silicon Valley models, and in some cases, better, according to their claims," Sheldon Fernandez, DarwinAI co-founder, told CBC News. "The resource efficiency is truly groundbreaking. Instead of monthly OpenAI subscriptions of $20 or $200, users get similar features for free, disrupting established business models and high valuations."
President Trump offered a more optimistic perspective, suggesting DeepSeek could benefit the U.S. "Instead of billions in spending, we could achieve the same results with less," he stated to the BBC, adding, "Cheaper, more efficient solutions are beneficial. The U.S. will maintain its AI dominance."
Despite DeepSeek's impact, Nvidia remains a $2.90 trillion company. The highly anticipated RTX 5090 and RTX 5080 GPUs are set for release this week, generating such demand that consumers are braving winter weather to camp outside stores.
