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 market value drop for Nvidia by nearly $600 billion. The introduction of DeepSeek caused a sharp decline in stocks of companies deeply involved in artificial intelligence. Nvidia, a leader in the GPU market essential for AI operations, experienced a historic 16.86% drop in its share value, 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 declines between 2.1% and 4.2%. AI server manufacturer Dell Technologies saw a more substantial drop of 8.7%.

DeepSeek's R1 model positions itself as a cost-effective alternative to Western AI models like ChatGPT. Built on the open-source DeepSeek-V3, it reportedly demands significantly less computing power and was trained at an estimated cost of just $6 million. Although these claims face skepticism, DeepSeek has raised questions about the substantial investments U.S. tech companies are making in AI, unsettling investors. The model quickly rose to the top of the most downloaded free app charts in the U.S., fueled by conversations about its effectiveness.

"[DeepSeek] performs as well as the leading models in Silicon Valley and in some cases, according to their claims, even better," Sheldon Fernandez, co-founder of DarwinAI, told CBC News. "But they did it with a fractional amount of the resources, which is really what is turning heads in our industry.

"Instead of paying OpenAI $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 offered an optimistic view, suggesting DeepSeek could be "a positive" for the U.S.

"Instead of spending billions and billions, you'll spend less and you'll come up with hopefully the same solution," he said, 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 impact of DeepSeek, remains a powerhouse with a market value of $2.90 trillion. The company is gearing up to launch the highly anticipated RTX 5090 and RTX 5080 GPUs this week, with enthusiasts so eager they're camping out in the cold to secure these new cards.