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 Nvidia's massive market value loss of nearly $600 billion.

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 drop—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 been contested, DeepSeek has raised questions about the massive AI investments of American tech giants, unsettling investors. Its popularity surged, reaching the top of the U.S. free app download charts, fueled by discussions surrounding its performance.

"DeepSeek performs comparably to leading Silicon Valley models, and in some instances, even better, according to their claims," Sheldon Fernandez, DarwinAI co-founder, told CBC News. "The remarkable aspect is achieving this with a fraction of the resources."

Fernandez further highlighted the disruption to existing business models: "Instead of monthly subscriptions of $20 or $200 for advanced models, users can access similar features for free, challenging the high valuations of many companies."

President Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the U.S. He stated (as reported by the BBC), "Instead of billions in spending, you'll spend less and hopefully achieve the same outcome. If you can do it cheaper and reach the same result, that's positive for us." He maintained the U.S.'s continued AI dominance.

Despite DeepSeek's impact, Nvidia remains a $2.90 trillion company. Its highly anticipated RTX 5090 and RTX 5080 GPUs are slated for release later this week, generating such high demand that consumers are braving winter weather to camp outside stores.