DeepSeek’s popularity should be wake-up call, Trump says

US President Donald Trump said Monday that Chinese AI startup DeepSeek’s dark-horse entry into the AI race should serve as a “wake-up call” for American companies developing artificial intelligence.

“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 told a Republican congressional retreat in Florida.

Trump’s comments came after the AI model powering DeepSeek’s chatbot began outperforming top US models, with the Chinese company saying they were made at a fraction of the cost.

By Monday, DeepSeek’s chatbot was the number one product on the Apple App Store, surpassing OpenAI’s ChatGPT chatbot that had taken the internet by storm in a similar fashion when it first burst onto the scene in early 2023.

DeepSeek rattles tech stocks

The increasing popularity of DeepSeek has shaken the confidence of investors, while raising bigger questions about the future of American AI models.

Nvidia, the leading supplier of AI chips, lost close to 600 billion in market cap on Monday, the biggest drop for any company on a single day in US history. 

In Japan, chip-testing equipment maker Advantest, a supplier to Nvidia, lost 10% on Tuesday after diving nearly 9% on Monday.

Chip-making equipment maker Tokyo Electron fell 5.3%, while technology start-up investor SoftBank Group was 6% lower.

Over in the US, Broadcom finished down 17.4%, followed by ChatGPT backer Microsoft which fell 2.1% and then Google parent Alphabet which ended down 4.2%. 

Trump says shock could also be ‘positive’ for US companies

Trump said the shock news could spur a “positive” future for US tech companies, as it would force them to innovate more cheaply.

“I’ve been reading about China and some of the companies in China, one in particular coming up with a faster method of AI and much less expensive method, and that’s good because you don’t have to spend as much money. I view that as a positive, as an asset,” Trump said.

“I view that as a positive because you’ll be doing that too, so you won’t be spending as much, and you’ll get the same result, hopefully,” he added.

Last week, Trump announced a $500 billion (€478 billion) project to build AI infrastructure in the US, led by Japanese giant SoftBank and ChatGPT maker OpenAI. 

dh/rm (AFP, Reuters)