President Donald Trump said Monday that the release of DeepSeek AI from a Chinese company should serve as a "wake-up call" for American industries, urging them to focus on competing to win. Speaking at a GOP event in Florida, Trump described the model's low cost as a "positive development," adding that instead of spending billions, companies could spend less and "come up with hopefully the same solution."
The remarks followed last week's release of DeepSeek's open-source R1 model, which the startup developed using older Nvidia AI chips for purportedly under $6 million. According to the source, R1 rivals leading Western chatbots such as OpenAI's o1 and, on certain benchmarks, surpasses them.
Market Fallout and Industry Response
The buzz around DeepSeek wiped out over $1 trillion from leading US tech stocks, with roughly $600 billion of those losses coming from Nvidia. The timing was awkward for the new administration, which had just announced the Stargate deal—a $500 billion private capital initiative for US AI infrastructure backed by OpenAI, Oracle, Softbank, and Emirati state-run investment firm MGX.
That sum reflects the industry's reliance on scaling: using more data and more AI chips to make models bigger. DeepSeek's ability to compete with far fewer resources has raised questions about that approach. Still, some industry leaders have struck a measured tone. OpenAI CEO Sam Altman and Microsoft CEO Satya Nadella praised DeepSeek's achievements, while Trump's AI and crypto czar David Sacks said on X that R1 "shows that the AI race will be very competitive" and stressed the US "can't be complacent."
Editorial Notes