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 U.S. tech sector, following a significant market downturn for Nvidia. Nvidia, a major player in the GPU market crucial for AI, experienced a staggering $600 billion drop in market value after DeepSeek's emergence.

The debut of DeepSeek triggered a sharp decline in AI-focused companies' stock prices. Nvidia suffered the most, with a 16.86% share plunge—a record on Wall Street. Microsoft, Meta Platforms, Alphabet (Google's parent company), and Dell Technologies also experienced losses, ranging from 2.1% to 8.7%.

Although this claim is debated, DeepSeek has raised concerns about the massive investments U.S. tech giants are making in AI, unsettling investors. DeepSeek's popularity surged, reaching the top of U.S. free app download charts amid growing discussions about its performance.

Sheldon Fernandez, co-founder of DarwinAI, commented to CBC News, stating that DeepSeek's performance rivals leading Silicon Valley models, and in some instances, surpasses them according to DeepSeek's claims. He highlighted the significantly lower resource requirements as a game-changer. The accessibility of DeepSeek's features for free, in contrast to paid subscription models, challenges the business models of many high-valuation companies.

President Trump offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the U.S. by potentially reducing AI development costs while achieving similar outcomes. He emphasized the importance of cost-effectiveness in AI development, while maintaining confidence in U.S. AI dominance.

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