 "This photo illustration shows the DeepSeek app on a mobile phone in Beijing. AFP")
US President Donald Trump said Monday that the low-cost Chinese AI model DeepSeek was a “wake-up call” for US firms after its emergence caused a rout in tech shares.
“Hopefully, the release of DeepSeek AI from a Chinese company should be a wake up call for our industries that we need to be laser-focused on competing to win,” Trump told a Republican congressional retreat in Miami.
However, Trump said the shock could also be “positive” for Silicon Valley by forcing it to innovate more cheaply.
“I would say that could be a positive,” Trump said. “So instead of spending billions and billions, you’ll spend less, and you’ll come up with hopefully the same solution.”
The introduction of a Chinese chatbot on Monday knocked $1 trillion off the top US tech index, igniting the fight for dominance in artificial intelligence. One investor dubbed this a “Sputnik moment” for the world’s AI superpowers.
The launch of DeepSeek, a rival to OpenAI and its ChatGPT tool, rattled investor confidence in the US artificial intelligence boom on Monday by seemingly delivering the same performance with fewer resources. As a result, investors punished global tech markets.
As investors processed the ramifications of the most recent AI model created by DeepSeek, the tech-heavy Nasdaq Composite finished down 3.1%, at one time wiping off more than $1 trillion from the index’s closing value of $32.5 trillion last week.
Impact Shorts
More ShortsTrump’s comments come after US chipmaker Nvidia, whose semiconductors fuel the AI sector, led a major stock crash, dropping about $600 billion in market value.
Apple surpassed Nvidia, a prominent manufacturer of the computer processors that drive AI models, as the most valuable listed business in the United States after its shares plummeted 17%, depleting its market worth by around $600 billion. Microsoft lost $7 billion while Google’s parent firm lost $100 billion.
The largest decline in US stock market history was experienced by Nvidia.
Just one week after taking office for a second term, Trump launched a $500 billion project to develop AI infrastructure in the US, headed by ChatGPT creator OpenAI and Japanese behemoth SoftBank.