Trump warns DeepSeek should be ‘wakeup call’ for America’s AI industry.
Newly elected US President Trump has called the breakthrough of China’s AI chatbot DeepSeek a “wake-up call” for America’s technology industry after the Chinese startup’s latest model, R1, surpassed OpenAI’s ChatGPT as the most downloaded free app on Apple’s App Store.
The rise of DeepSeek has surprised the Silicon Valley innovators and triggered a sharp selloff in tech stocks, including a $500 billion market value loss for Nvidia.
Addressing a Republican congressional retreat in Miami on Saturday, Trump highlighted the need for US tech firms to refocus on innovation.
“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 stated.
DeepSeek, a little-known startup based in Hangzhou, has developed its AI models using cost-efficient methods.
According to its researchers, their V3 model was trained on 2,000 Nvidia H800 chips for under $6 million.
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In comparison, US companies like Meta and OpenAI rely on the more advanced H100 chips, which are significantly more expensive.
This low-cost yet high-performance breakthrough has left US tech executives questioning the efficacy of export controls on advanced chips.
While Trump acknowledged the challenges posed by DeepSeek’s innovation, he also noted its potential benefits. “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,” he told reporters aboard Air Force One, adding that the US will remain a dominant player in AI development.
Stock market effect
The rise of DeepSeek has shocked global markets. On Monday, Nvidia’s shares plummeted, dragging down other major US tech firms, while tech-focused shares in Japan also saw a steep decline.
However, stock markets in China, South Korea, and Taiwan remained closed due to the Lunar New Year holiday.
Adding to the turbulence, DeepSeek reported a “large-scale malicious attack” on its platform the same day its app surged to the top of Apple’s App Store. While the nature of the attack remains unclear, the startup has reassured users that its operations are secure. DeepSeek’s success underscores China’s growing competitiveness in the global AI race, despite restrictions on acquiring advanced US technologies.
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President Trump’s remarks show a broader concern in Washington about maintaining America’s technological edge.
DeepSeek, which was founded in 2023, has quickly risen to fame by defeating rivals with lesser resources. Its achievements are a testament to China’s ability to innovate under constraints and could mark a turning point in the global AI landscape.
