Trump Says DeepSeek's Breakthrough "Could Be Good" for the US
US President Donald Trump commented on China's latest AI developments, suggesting that they could benefit America by lowering costs. "If you could do it cheaper, if you could do it [for] less [and] get to the same end result, I think that's a good thing for us," Trump said aboard Air Force One. He added that the US would remain a dominant player in the AI field despite the breakthrough.
DeepSeek's Impact on the Global Technology Market
The emergence of DeepSeek's low-cost AI chatbot sent shockwaves through Wall Street, with Nvidia losing over $500 billion in market value. Other major technology stocks also fell sharply, while DeepSeek's app became the most downloaded free app in the US within days of its launch.
DeepSeek's development costs reportedly totaled just $5.6 million, a fraction of the billions spent by US-based companies like OpenAI, Google, and Anthropic. This raised questions about the sustainability of high-cost AI development models in the US.
AI's "Sputnik Moment"
Venture capitalist Marc Andreessen referred to DeepSeek's rise as AI's "Sputnik moment," drawing parallels to the space race. The app's rapid adoption has disrupted the AI sector and shaken America's confidence in its technological dominance.
Nvidia shares plunged 17%, marking a historic loss of nearly $600 billion in market value. Meanwhile, DeepSeek's ability to deliver advanced AI at a lower cost is forcing Silicon Valley to reassess its strategies.
Debates Over DeepSeek's Financials
While some praised DeepSeek's innovation, others questioned its financial claims. Veteran analyst Gene Munster suggested that the company might be subsidized or that its numbers might not fully reflect reality. "The chatbot is surprisingly good, which just makes it hard to believe," he said.
US Technology Leadership Challenged
OpenAI's Sam Altman and Oracle's Larry Ellison had recently announced Stargate, a joint venture aimed at reinforcing US dominance in AI with a $500 billion investment. However, DeepSeek's emergence has highlighted vulnerabilities in America's tech strategy, particularly around cost and efficiency.
Trump described DeepSeek as a "wake-up call" for US tech, emphasizing the importance of cost-effective innovation. "Finding a way to do cheaper AI is ultimately a good thing," he said.
Chip Export Restrictions Under Scrutiny
DeepSeek's success has cast doubt on the effectiveness of US restrictions on advanced chip exports to China. Experts argue that these curbs may have inadvertently spurred Chinese companies to become more innovative and efficient.
"DeepSeek’s success demonstrates that constraints can drive creativity," said Marina Zhang, an associate professor at the University of Technology Sydney.
The Future of AI
DeepSeek's low-cost model has set a new benchmark in the AI industry, forcing competitors to rethink their strategies. As the AI race heats up, the question remains: can the US maintain its lead, or will DeepSeek's innovation redefine the global landscape?
