‘DeepSeek a Wake-Up Call,’ Trump Reacts to Chinese Chatbot Disrupting US Market
Former U.S. President Donald Trump has called the rise of the Chinese artificial intelligence (AI) company DeepSeek a “wake-up call” for the American tech industry.
The debut of DeepSeek’s AI model, DeepSeek-R1, shook Wall Street, with major U.S. tech firms—especially Nvidia—experiencing significant stock declines. Nvidia, the world’s leading AI chipmaker, saw its market value drop by nearly $600 billion (£482 billion) after DeepSeek revealed its model was developed at a fraction of the cost compared to its U.S. competitors. The disruption has sparked concerns over the future of the U.S.’s AI leadership and the investments needed to stay competitive.
Despite the initial market panic, Trump took a calm approach when speaking to reporters on Air Force One. “If you could do it cheaper, if you could do it for less and get the same end result, I think that’s a good thing for us,” he said, adding that he was “not concerned” about the breakthrough and expressed confidence that the U.S. would continue leading in AI development.
DeepSeek is based on the open-source DeepSeek-V3 model, which the company claims was trained for just $6 million (£4.2 million)—a significantly lower figure than the billions spent by leading U.S. firms like OpenAI and Google DeepMind. However, some industry experts have questioned the accuracy of DeepSeek’s claims.
The Chinese firm has stated that DeepSeek-R1’s performance in areas like mathematics, coding, and natural language reasoning is “on par with” OpenAI’s latest models. Even OpenAI CEO Sam Altman acknowledged the model’s potential, calling it “impressive, especially considering what they’re able to deliver for the price,” though he assured that OpenAI would “obviously deliver much better models” in the future.
Marina Zhang, an associate professor at the University of Technology Sydney, believes DeepSeek’s success shows that “software ingenuity and data efficiency can make up for hardware limitations.” Ion Stoica, co-founder of AI software company Databricks, added that the lower costs of AI could accelerate adoption. “This cost reduction can speed up AI progress, which will expand the market and increase its value,” he said.
DeepSeek’s rise comes amid increasing restrictions from the U.S. government on AI chip exports to China. To counter these limitations, Chinese AI developers have adopted strategies like sharing research and working on ways to reduce dependency on advanced hardware.
DeepSeek claims its model was trained with just 2,000 specialized chips, far fewer than the 16,000 typically used for leading U.S. models. However, some, including Tesla and SpaceX CEO Elon Musk, have cast doubt on these claims. Responding to reports that DeepSeek has access to about 50,000 Nvidia chips that are banned from export to China, Musk simply remarked: “Obviously.”
Following Monday’s turbulence in U.S. markets, the FTSE 100, the U.K.’s top stock index, remained stable, rising by 0.46% in early Tuesday trading. Nvidia’s stock also showed signs of recovery, gaining slightly in after-hours trading, while Nasdaq futures rose by 0.1%. However, shares in Japanese AI-related companies, such as Advantest, SoftBank, and Tokyo Electron, dropped sharply, and the Nikkei 225 index fell 1.4%.
Founded in 2023 by Liang Wenfeng, an electronic engineering graduate based in Hangzhou, China, DeepSeek has already become the most downloaded free app in the U.S. within just a week of its launch, indicating strong early adoption. As the AI landscape continues to evolve, the company’s rise could force American tech firms to rethink their development strategies, pricing models, and long-term investments in AI.
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