Washington/Miami: Former US President Donald Trump has described the emergence of China’s low-cost AI model, DeepSeek, as a “wake-up call” for American industries, emphasizing the need for greater focus and innovation in the competitive global AI landscape. Trump made these remarks during a Republican congressional retreat in Miami, highlighting the disruptive impact of DeepSeek on the US tech sector.
“Hopefully, the release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win,” Trump stated. He acknowledged that while the Chinese model has caused turmoil in Silicon Valley, it could ultimately spur positive outcomes by encouraging more cost-effective innovation. “Instead of spending billions, you’ll spend less, and hopefully come up with the same solution,” he added.
The launch of DeepSeek’s R1 chatbot sent shockwaves across the US stock market on Monday, wiping out nearly $1 trillion in value from major tech indices. Nvidia, the leading chipmaker that powers much of the AI industry, suffered a record one-day loss of $600 billion in market value. Other tech giants like Microsoft and Meta Platforms also faced significant declines, reflecting investor concerns about the potential disruption to the lucrative AI supply chain.
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DeepSeek, a startup headquartered in Hangzhou, China, has demonstrated the ability to produce AI models at a fraction of the cost incurred by US counterparts like OpenAI and Google. The company’s R1 model reportedly rivals OpenAI’s ChatGPT and Google’s Gemini in performance but with significantly lower development costs. The DeepSeek assistant has even surpassed ChatGPT in downloads on Apple’s App Store, further underscoring its appeal.
Industry experts have noted that DeepSeek’s emergence could challenge the US’s dominance in AI. Marc Andreessen, a prominent venture capitalist, compared the moment to the Cold War-era “Sputnik moment,” where the Soviet Union’s satellite launch galvanized the US space program. Sam Altman, CEO of OpenAI, expressed respect for DeepSeek’s achievements but reaffirmed his confidence in American innovation. “It’s invigorating to have new competition,” Altman said. “We will pull up some releases and deliver much better models.”
DeepSeek was founded in 2023 by Liang Wenfeng, an entrepreneur and hedge fund manager based in Hangzhou. Liang began experimenting with Nvidia chips in 2021 and bankrolled the startup using his hedge fund, High-Flyer Capital. Despite its rapid success, DeepSeek has faced scrutiny for content restrictions on politically sensitive topics, raising questions about its potential for global adoption.
The disruptive impact of DeepSeek highlights the growing AI race between the US and China. Trump, while cautioning against complacency, suggested the competition could ultimately benefit Silicon Valley by accelerating innovation and reducing costs. His remarks coincide with ongoing US efforts to bolster its AI infrastructure, including a $500 billion initiative led by SoftBank and OpenAI announced earlier this month.
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