Donald Trump has labeled China's new 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-focused company stocks. Nvidia, a major GPU supplier for AI models, suffered the most significant blow, experiencing a 16.86% share drop—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 has been contested, DeepSeek has raised concerns about the massive AI investments of American tech giants, unsettling investors. Its popularity surged, reaching the top of U.S. free app download charts amidst growing discussions about its capabilities.
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 the disruption to existing business models, as DeepSeek offers comparable features for free, challenging 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 costs while achieving similar results. He emphasized the U.S.'s continued AI dominance.
Despite DeepSeek's impact, Nvidia maintains a $2.90 trillion valuation. The company is poised to release its highly anticipated RTX 5090 and RTX 5080 GPUs later this week, generating significant consumer demand.
