President Donald Trump has called Chinese startup DeepSeek’s AI breakthrough a “wakeup call” for American industry while speaking to House Republicans at his Doral resort in Miami.
The remarks came as DeepSeek’s cost-efficient AI development triggered a massive sell-off in U.S. technology stocks.
Newsweek reached out to a spokesperson for Trump via email on Monday for comment.
Why It Matters
The sell-off in U.S. tech stocks was immediate and severe, stemming from concerns that DeepSeek, and thus China, has caught up with American companies at the forefront of generative AI—at a fraction of the cost.
Last year, Anthropic CEO Dario Amodei revealed training some AI models could cost up to $1 billion. DeepSeek reportedly built its LLM for less than $6 million, compared to OpenAI‘s estimated $100 million for Sam Altman’s GPT-4.
What To Know
The market impact was historic, with Nvidia’s stock falling 17 percent, erasing nearly $600 billion in market capitalization—the largest one-day loss for any publicly listed company. Broadcom also fell over 17 percent, while the tech-heavy Nasdaq Composite dropped 3.1 percent. Microsoft and Alphabet lost more than 2.5 percent each. Meta stood out, rising 1.91 percent.
The president made the comments during a speech at a retreat of House Republicans at his Doral golf resort in Miami, where he urged the House GOP—who came together to strategize on legislative issues—to remain united to advance his policy goals.
Trump struck an unexpectedly “positive” tone about the technology: “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.”
DeepSeek has surpassed ChatGPT to become the most downloaded app in the U.S., while simultaneously upending the narrative around AI development costs.
The sell-off particularly impacted tech leaders who had attended Trump’s inauguration, including Nvidia’s Jensen Huang, who lost an estimated $20.7 billion in stock value.
The president added that Chinese leaders also told him the United States had the most “brilliant” scientists in the world, adding, “We always have the ideas. We’re always first. So, I would say that’s a positive that could be very much a positive development. So instead of spending billions and billions, you’ll spend less, and you’ll come up with, hopefully, the same solution.”
Trump on DeepSeek: I view that as a positive. If it is fact and it is true, and nobody knows, but I view that as a positive. pic.twitter.com/uJiVbocOrN
— Acyn (@Acyn) January 27, 2025
Trump-Tech Connection
The market rout particularly affected tech leaders who maintain close ties with Trump. Tesla and X CEO Elon Musk, Meta’s Mark Zuckerberg, Amazon‘s Jeff Bezos, and Alphabet’s Sundar Pichai had all attended Trump’s inauguration.
Nvidia’s Jensen Huang, who also attended Trump’s inauguration, lost an estimated $20.7 billion in stock value on Monday.
Meanwhile, OpenAI’s Sam Altman was also spotted at the Capitol Rotunda last week. These relationships highlight the complex dynamics between Silicon Valley leadership and the former president as the AI race intensifies.
What People Are Saying
Venture capitalist Marc Andreessen on X: “DeepSeek R1 is AI’s Sputnik moment.”
Microsoft CEO Satya Nadella on LinkedIn: “Jevons paradox strikes again! As AI becomes more efficient and accessible, its adoption will skyrocket, transforming it into an indispensable commodity.”
What Happens Next
Trump also announced plans to reshape the tech manufacturing landscape: “In the very near future we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States of America.”
He added that he would “also be placing tariffs on steel, aluminum and copper.”
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