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—nearly $600 billion.
DeepSeek's debut triggered a sharp decline in AI-focused company stocks. Nvidia, a leading GPU provider crucial for AI model operation, suffered the most, experiencing a 16.86% share plunge—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 is debated, DeepSeek has raised concerns about the massive AI investments of American tech firms, unsettling investors. Its popularity surged, reaching the top of U.S. free app download charts amidst growing discussions about its capabilities.
Sheldon Fernandez, co-founder of DarwinAI, commented to CBC News, stating that DeepSeek's performance rivals leading Silicon Valley models, potentially even surpassing them in some areas, yet using significantly fewer resources. He highlighted the disruption to existing business models, as DeepSeek offers comparable features for free, challenging the high valuations of many established companies.
President Trump 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 AI dominance.
Despite DeepSeek's impact, Nvidia remains a $2.90 trillion company. The release of its highly anticipated RTX 5090 and RTX 5080 GPUs is imminent, generating such demand that consumers are braving winter weather to camp outside stores.
