Donald Trump has labeled China's new AI model, DeepSeek, a "wake-up call" for the American 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 leading GPU provider crucial for AI model operation, suffered the most significant blow, experiencing a 16.86% share plunge – a Wall Street record. Microsoft, Meta Platforms, Alphabet (Google's parent company), and Dell Technologies also saw declines ranging from 2.1% to 8.7%.
While this claim faces some scrutiny, DeepSeek's impact has raised questions about the massive AI investments by American tech giants, unsettling investors. Its rapid ascent to the top of the U.S. most downloaded free app chart further underscores its growing influence.
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 using a fraction of the resources." He added that the free access to comparable features disrupts the business models underpinning the high valuations of many tech companies.
President Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the U.S. by potentially reducing development costs while achieving similar results. He reiterated the U.S.'s continued dominance in the AI field.
Despite DeepSeek's impact, Nvidia remains a $2.90 trillion company. The company's highly anticipated RTX 5090 and RTX 5080 GPUs are slated for release later this week, generating considerable consumer demand, as evidenced by consumers braving winter weather to camp outside stores.
