Trump warns of ‘wake-up call’ for US tech companies

US President Donald Trump has called The Rise of Chinese Company Deepseek “A Wake-Up Call” for the US tech industry, following the advent of his artificial intelligence (AI) model triggered shock waves on Wall Street.

Shares in larger tech companies like Nvidia fell sharply, with the chip giant lost almost $ 600 billion. (£ 482 billion) in the market value.

What has shaken the industry is Deepseek’s claim that its R1 model was made to a fraction of the cost of its rivals -raising questions about the future of America’s AI dominance and the extent of investments planned by US companies.

Deepseek has become the most downloaded free app in the US just a week after it was launched.

In response to the news, Trump said that recent developments in China’s AI industry can be “a positive” for the United States.

“If you could make it cheaper if you could do [for] less [and] Come to the same end result. I think it’s a good thing for us, ”he told journalists aboard the Air Force One.

He also said he was not worried about the breakthrough that adding the United States will remain a dominant player in the field.

Deepseek is run by the Open Source Deepseek -V3 model, which its researchers claim to be trained for about $ 6 million. (£ 4.2 million) – significantly less than the billions used by rivals. But this claim has been disputed by others in AI.

Its emergence comes as the United States limits the sale of the advanced chip technology that drives AI to China.

To continue their work without stable supplies with imported advanced chips, Chinese AI developers have shared their work with each other and experimented with new approaches to the technology.

This has resulted in AI models that require far less computing power than before.

It also means that they cost much less than previously thought possible, which has the potential to increase industry.

Following the shock of the US markets on Monday, the FTSE 100 share index of Britain’s largest publicly listed companies appeared resilient in early trade on Tuesday and increased by 0.46%.

Futures on the technical-heavy NASDAQ index also increased by 0.1%after the NVIDIA share was crossed slightly in trade after hours.

But shares in Japanese AI-related companies, including coverage, softbank and Tokyo Electron, fell sharply, which helped push benchmark Nikkei 225 down by 1.4%.

Several other markets in Asia are closed to Lunar New Year’s holidays. China’s financial markets are closed from Tuesday and will reopen on February 5th.

The company was founded in 2023 by Liang Wenfeng in Hangzhou, a city in southeastern China.

The 40-year-old, an information and electronic engineering educated, also founded the Hedge Foundation, which supported Deepseek.

He was recently seen at a meeting between industry experts and Chinese Prime Minister Li Qiang.

In a July 2024 interview with China AcademyMr. Liang said he was surprised by the reaction to the previous version of his AI model.

“We didn’t expect prices to be such a sensitive question,” he said.

“We simply followed our own pace, calculate costs and set prices accordingly.”

After Deepseek-R1 was launched earlier this month, the company boasted “Performance on par with” one of Openai’s latest models when used for tasks such as math, coding and natural language.

Deepseeks technology has been praised by high -profile figures including Openai Chief Sam Altman, who called it “an impressive model, especially about what they are able to deliver for the price”, although he added that Openai “obviously would deliver much better models” moving ”forward.

“Deepseek’s ability to compete with US models despite limited access to advanced hardware shows that software ingenuity and data efficiency can compensate for hardware constraints,” said Marina Zhang, associate professor at the University of Technology Sydney, who focuses on China’s high-tech industries.

Ion Stoica, co -founder and executive chairman of AI Software Company Databricks, the BBC told the lower cost of Deepseek could spur more companies to adopt AI in their business.

“If that happens, this reduction in costs can speed up AI’s progress,” he said. “So, overall, the market will expand faster and the value of the market will grow faster.”

The Chinese company claims that its model can be trained on 2,000 specialized chips compared to an estimated 16,000 for leading models.

But not everyone is convinced. Some have doubts about some of Deepseek’s claims, including Tech Mogul Elon Musk.

He responded to a post that claimed that Deepseek actually has about 50,000 nvidia chips, which has now been banned from export to China and said, “It’s clear.”