Chinese AI DeepSeek a 'Wake-Up Call' for U.S. Tech Firms, Donald Trump Says, After Nvidia’s World-Record $600 Billion Loss

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 major GPU supplier for AI models, suffered the most significant blow, experiencing a 16.86% share plunge—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 faced some scrutiny, DeepSeek has successfully challenged the massive AI investments of American tech giants, unsettling investors. Its popularity surged, reaching the top of the 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 the disruption to existing business models, noting that DeepSeek's free accessibility undercuts the pricing strategies of companies justifying high valuations.

Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the U.S. He stated (as reported by the BBC) that lower development costs could lead to comparable solutions, potentially benefiting the American economy. He maintained that the U.S. would retain its AI dominance.

Despite DeepSeek's impact, Nvidia remains a $2.90 trillion company. The company is poised to release its highly anticipated RTX 5090 and RTX 5080 GPUs later this week, generating significant consumer demand, as evidenced by consumers braving cold weather to queue outside stores.