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 U.S. tech sector following Nvidia's massive market value decline of nearly $600 billion.

DeepSeek's emergence triggered a sharp downturn in AI-focused company stocks. Nvidia, a leading GPU provider crucial for AI model operation, suffered the most significant blow, experiencing a 16.86% share plunge—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%.

Although this claim is contested, DeepSeek has raised concerns about the substantial AI investments of American tech giants, unsettling investors. Its popularity surged, reaching the top of the U.S. free app download charts fueled by growing discussions about its efficacy.

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 with a fraction of the resources." He further highlighted that DeepSeek's free accessibility disrupts the business models underpinning the high valuations of many established companies.

Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the U.S. by potentially reducing the billions spent on AI development while achieving comparable results. He emphasized the potential for cost savings and reiterated the U.S.'s continued AI dominance.

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 evidenced by lines forming outside stores in January's cold weather.