US President Donald Trump has expressed that the technology developed by Chinese startup DeepSeek should serve as a motivation for American companies, noting that it’s positive to see Chinese firms developing a more affordable and faster approach to artificial intelligence.
“The launch of DeepSeek’s AI from a Chinese enterprise should act as a wake-up call for our industries, emphasizing the need to be laser-focused on competing to succeed,” Mr. Trump remarked in Florida.
Globally, investors sold off technology stocks yesterday amid fears that the introduction of an economical Chinese AI model could jeopardize the supremacy of existing US-based AI leaders.
“I’ve been following developments in China, particularly with one company that has created a quicker and significantly cheaper AI method, which is beneficial as it cuts down on expenses. I consider this a positive development, an asset,” Mr. Trump stated.
“It’s a positive realization because you, too, will have the opportunity to save costs while hopefully achieving the same results,” he added.
According to Mr. Trump, Chinese leaders remarked that the United States possesses the most brilliant scientists globally, suggesting that if Chinese industries can produce affordable AI technology, American companies will eventually adapt.
“We’re always the innovators. We’re consistently first. So, I would interpret this as a potentially very positive evolution. Instead of spending billions and billions, you can spend less and still arrive at a similar solution,” Mr. Trump commented.
What is DeepSeek and why is it shaking up the AI industry?
The recent launch of the latest DeepSeek model initially went unnoticed, overshadowed by Mr. Trump’s inauguration on the same day.
However, over the weekend, the chatbot from this Chinese AI startup skyrocketed to become the most downloaded free app on Apple’s US App Store, overtaking OpenAI’s ChatGPT.
DeepSeek claims it has developed its newest model, the R1, at a fraction of the cost major firms typically allocate for AI development, particularly for expensive Nvidia chips and software.
This development is particularly noteworthy given the AI surge sparked by ChatGPT’s introduction in late 2022, which has propelled Nvidia into becoming one of the world’s most valuable companies.
Additionally, this development arises amid a backdrop of the US government’s efforts to ban Chinese-owned TikTok in the country or compel its sale.
DeepSeek became the most downloaded free app on Apple’s US App Store
David Sacks, Mr. Trump’s AI advisor and notable tech investor, asserted that DeepSeek’s achievements validate the White House’s decision to overturn executive orders enacted during Joe Biden’s presidency that set safety standards for AI development.
The regulations “would have restricted American AI companies without any assurance that China would adhere to similar standards,” Mr. Sacks stated on X.
Microsoft’s CEO Satya Nadella mentioned that more affordable AI is beneficial for everyone.
Nevertheless, at the World Economic Forum in Davos last week, Ms. Nadella cautioned: “We must take developments from China very, very seriously.”
Microsoft is planning to invest $80 billion in AI this year, while Meta announced a minimum of $60 billion in investments on Friday.
A significant portion of this funding is directed towards Nvidia, whose shares experienced a staggering 17% decline.
This situation is particularly striking, as DeepSeek, being a Chinese firm, has limited access to Nvidia’s cutting-edge chips due to export restrictions imposed by the US government.
Elon Musk, who has heavily invested in Nvidia chips for his venture xAI, suspects DeepSeek of clandestinely obtaining banned H100 chips—a claim echoed by the CEO of ScaleAI, a notable Silicon Valley startup backed by Amazon and Meta.
However, such allegations “resemble a scenario where a wealthy team gets outperformed by a less affluent team,” remarked Hong Kong-based investor Jen Zhu Scott on X.
In response, Nvidia stated that DeepSeek’s technology is “fully compliant with export control regulations.”
