Trump calls DeepSeek AI a ‘wake-up call’ for US tech firms
US President Donald Trump has described the rise of Chinese AI company DeepSeek as “a wake-up call” for the US tech industry. This follows the release of DeepSeek’s AI model, R1, which has disrupted the global technology sector and caused significant fluctuations in stock markets.
Shares in major tech companies, including Nvidia, plunged sharply after the launch, with the chipmaker losing almost $600 billion in market value.
DeepSeek’s claim that its R1 model was developed at a fraction of the cost of its competitors has raised questions about the future of US dominance in artificial intelligence and the scale of investment needed to maintain leadership.
The company’s R1 model, built using the open-source DeepSeek-V3, reportedly required just $6 million to develop—far less than the billions spent by rivals. Its technology has been praised for its efficiency, with DeepSeek claiming its model can perform on par with leading AI systems using only 2,000 specialized chips compared to the 16,000 required by its competitors.
This innovation has positioned DeepSeek as a formidable competitor, especially in light of US restrictions on advanced chip sales to China.
The company’s collaborative approach to AI development has enabled Chinese firms to adapt and produce efficient systems despite hardware limitations.
Speaking aboard Air Force One, President Trump downplayed concerns, suggesting that DeepSeek’s breakthroughs could ultimately benefit the US.
“If you could do it cheaper and get the same end result, I think that’s a good thing for us,” he stated. Trump also reaffirmed confidence in America’s position as a dominant player in AI.
The launch of DeepSeek-R1 has caused ripples in financial markets. While Nvidia’s shares suffered initially, they saw slight gains in after-hours trading.
Meanwhile, Japan’s AI-related firms, including Advantest and Softbank, experienced significant losses, with the Nikkei 225 index dropping 1.4%.
DeepSeek’s rapid success has not gone unnoticed, becoming the most downloaded free app in the US within a week of its release.
Industry experts predict that the company’s lower-cost AI could accelerate the adoption of AI across various sectors, potentially reshaping the global market.
DeepSeek was founded in 2023 by Liang Wenfeng in Hangzhou, China. A graduate in information and electronic engineering, Liang has also gained attention for his innovative approach to AI development. In a 2024 interview, he revealed that DeepSeek’s pricing strategy was based on cost efficiency rather than market disruption.
While DeepSeek’s achievements have been praised, some experts remain skeptical about its claims. Notably, tech mogul Elon Musk questioned reports of DeepSeek’s reliance on only 2,000 chips, suggesting the company may secretly possess 50,000 Nvidia chips, which are now banned for export to China.
Despite the controversies, DeepSeek’s emergence highlights China’s growing influence in AI and has sparked debates on how US firms should respond to the shifting technological landscape.
Source: BBC
