Donald Trump has labeled China's new AI model, DeepSeek, a "wake-up call" for the U.S. tech sector following a significant market value drop for Nvidia, nearing $600 billion.
DeepSeek's emergence triggered a sharp decline in AI-focused company stock prices. Nvidia, a leading GPU provider crucial for AI model operation, suffered the most, experiencing a 16.86% share plunge—a record loss 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 faces some skepticism, DeepSeek has raised concerns about the massive AI investments by American tech giants, unsettling investors. Its popularity surged, reaching the top of the U.S. free app download charts, fueled by 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 the potential for free access to features previously requiring substantial monthly subscriptions.
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 emphasized the U.S.'s continued dominance in the AI field.
Despite DeepSeek's impact, Nvidia retains a $2.90 trillion valuation. The company's upcoming release of the RTX 5090 and RTX 5080 GPUs is generating considerable anticipation, with consumers braving inclement weather to secure early purchases.
