Donald Trump has labeled China's new AI model, DeepSeek, a "wake-up call" for the US tech sector following Nvidia's staggering $600 billion market value loss. DeepSeek's emergence triggered a sharp decline in AI-focused company stocks. Nvidia, a major GPU supplier for AI, suffered the most, experiencing a 16.86% share drop – a Wall Street record. Microsoft, Meta, Alphabet, and Dell Technologies also saw significant declines, ranging from 2.1% to 8.7%.
Although this cost claim is debated, DeepSeek has raised questions about the billions invested by American tech firms in AI, unnerving investors. Its popularity surged, reaching the top of US app download charts amidst growing discussions about its capabilities.
Sheldon Fernandez, DarwinAI co-founder, 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 that DeepSeek's free accessibility disrupts the business models underpinning the high valuations of many established AI companies.
Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the US. He noted the potential for cost savings while achieving similar results, emphasizing the US's continued AI dominance.
Despite DeepSeek's impact, Nvidia retains a $2.90 trillion valuation. The company's upcoming RTX 5090 and RTX 5080 GPU releases are generating significant anticipation, with consumers braving winter weather to secure early purchases.
