Donald Trump has characterized the new Chinese AI model, DeepSeek, as a "wake-up call" for the U.S. tech sector following Nvidia's significant market value decline of nearly $600 billion.
DeepSeek's emergence triggered a sharp downturn in AI-focused company stocks. Nvidia, a major GPU supplier for AI models, suffered the most, 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 is disputed by some, DeepSeek has raised questions about the massive AI investments of American tech firms, unsettling investors. Its popularity surged, reaching the top of U.S. free app download charts amidst growing discussions about its performance.
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.
President Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the U.S. by reducing development costs while potentially achieving similar results. He reiterated the U.S.'s continued dominance in the AI field.
Despite DeepSeek's impact, Nvidia retains a $2.90 trillion valuation. The company is poised to launch its highly anticipated RTX 5090 and RTX 5080 GPUs later this week, generating significant consumer demand.
