US President Donald Trump described the rise of Chinese AI company DeepSeek as “a wake-up call” for the US tech industry. DeepSeek’s R1 AI model has disrupted Wall Street, leading to sharp losses for major tech firms like Nvidia, which lost nearly $600 billion in market value. The industry’s surprise stems from DeepSeek’s claim that its R1 model was developed at a fraction of the cost of its competitors, challenging the US’s AI dominance and investment strategies. Within a week of its launch, DeepSeek became the most downloaded free app in the US. Despite the breakthrough, Trump suggested that cost-effective advancements could benefit the US and reaffirmed confidence in America’s leadership in AI. However, DeepSeek has raised cybersecurity concerns in some countries, with Australian Science Minister Ed Husic advising caution.
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Related: DeepSeek AI Wipes Off $1 Trillion From US Tech Giants In Single Day.
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“Donald Trump sounds the alarm as China’s AI capabilities surge forward,🚨💻 with DeepSeek rivaling AI’s models 🤖💡 Nvidia takes a hit, losing nearly $600M in market value 📉💸.🤔
On Monday, January 27, US President Donald Trump said that the low-cost Chinese AI model “DeepSeek” was a “wake-up call” for US firms after its emergence caused a rout in tech shares. Addressing the Republican congressional retreat in Miami, Donald Trump said, “Hopefully, the release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win.” The US President further said that the shock could also be “positive” for Silicon Valley by forcing it to innovate more cheaply. “So instead of spending billions and billions, you’ll spend less, and you’ll come up with hopefully the same solution,” he added. Notably, Donald Trump’s comments came after US chip maker Nvidia, whose semiconductors power the artificial intelligence (AI) industry, suffered a massacre in tech stocks on Monday after it lost nearly USD 600 billion of its market value.”
China just released Deepseek R1, one of the most advanced open source AI tools that is an immediate rival to OpenAI. China built Deepseek in only two months with a budget of $6 million, completely shocking the entire AI industry and future of Silicon Valley.
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Table of Contents
Intro to Deepseek R1
China’s Message to Trump
Why American CEOs are in Shock
America’s Mistake in AI
How is the USA sanctioning the world in tech?
Has Trump’s trade war failed?
Why Trade War Will Hurt USA
Why Chinese Companies Are Going Overseas
China’s Microchip Industry
Deepseek Price Advantage
Why China Can Innovate
How China Replaced America as AI Leader
The Future of Tech with Trump
Why US and China Must Work Together
China has unveiled a new technology that is shaking up the global tech world. What makes this even more fascinating is the timing of its release and what it means for the future of US-China relations. On January 20th, the same day Donald Trump was sworn in as the 47th President of the United States, China launched Deep Seek R1. This advanced AI tool, made for deep data analysis, is a direct competitor to America’s OpenAI.
It took companies like Google and OpenAI years and billions of dollars to create their AI models. Yet, a Chinese research lab developed a competitive model in just two months using simplified GPUs. The total cost was only $6 million—not billions. This breakthrough is the biggest news coming out of China right now. It will have a massive impact on the future of technology worldwide. The timing of the release also sends a strong message to the US.
China deliberately released this AI on the morning of Trump’s inauguration. It was meant to show that China has not only survived US sanctions under the Biden administration but has thrived. The US imposed strict tech sanctions to curb China’s growth, but this launch proves those efforts were not enough. Deep Seek R1 performs just as well as America’s AI but was developed with less advanced technology and at a fraction of the cost.
Even more surprising, China made Deep Seek R1 open-source. This means anyone can access, modify, and use the software. If models like Deep Seek R1 can deliver competitive results at low costs, it will challenge industry leaders like OpenAI, Google, Anthropic, and Meta. Silicon Valley executives are now worried about what this means for the future.
The US tech industry was supposed to dominate AI, with companies like Nvidia, Google, and Meta leading the way. However, China has managed to overcome obstacles and achieve the impossible. To understand the significance, consider what Eric Schmidt, former CEO of Google, said in May 2024. He claimed the US was two to three years ahead of China in AI—a massive lead in the tech world. But by November, he admitted during a Harvard speech that Chinese companies like Alibaba and Tencent were quickly closing the gap. He confessed, “I thought the restrictions on chips would hold them back. This is shocking to me.”
These developments mark the beginning of a new chapter in US-China relations with Trump back in office. It raises big questions about the future of the trade war and global politics. Will Trump continue to pressure China or work towards cooperation? Let’s break down what this means.
The US government recently imposed new restrictions on AI chips. This policy blocks access to advanced AI technology for countries outside a select group of close allies. Interestingly, allies like Mexico and India are excluded from full access, showing how the US is prioritizing its global dominance over free trade. This decision may alienate many countries, leading to a shift in global partnerships.
Trump’s trade war with China began in 2018 with two goals: reduce the US trade deficit with China and limit China’s manufacturing dominance. However, both goals have failed. China’s trade surplus has grown to a record $1 trillion, and its share of global manufacturing has increased from 24% in 2018 to 27% today. By 2030, it is predicted to reach 45%. Despite US efforts to contain China, Chinese factories are now dominating global manufacturing on a scale not seen since post-World War II America.
Singapore’s former UN ambassador, Kishore Mahbubani, has warned the US about the dangers of its current path. He believes that if the US continues to decouple from China, it risks losing its connections to the rest of the world. Many Chinese companies are now aggressively expanding overseas, taking advantage of globalisation sparked by US tariffs.
One area where China has made huge progress is in semiconductors and AI. For years, China imported billions of dollars’ worth of US microchips. But when the US cut off access, China redirected those resources to its domestic tech companies. As a result, these companies became more profitable, innovative, and capable. This led to the development of Deep Seek R1.
Deep Seek R1 is a major concern for Silicon Valley. It shows that you don’t need billions of dollars to create competitive AI models. Engineers at US tech companies are now racing to study and replicate Deep Seek’s success. Meta’s AI team recently admitted they are trying to learn from Deep Seek to improve their own models. The biggest shock is how China built a rival to OpenAI in less than two months, for only $6 million.
This breakthrough highlights China’s ability to innovate. Just ten years ago, critics doubted China’s capacity for innovation. Today, however, even prominent American investors like Mark Andreessen have praised Deep Seek R1 as one of the most impressive breakthroughs in AI. He called its open-source model a “profound gift to the world.”
Deep Seek R1 has already become the preferred model for AI researchers at top US universities like Stanford and MIT. Independent tests show that its performance matches OpenAI’s models but at a cost 30 times lower. This price difference has major implications for the tech industry.
As Mark Andreessen noted, two major events this week—Trump’s return and China’s AI breakthrough—may define the decade. Deep Seek R1 has shaken the tech world, and Trump’s policies will shape global trade. Will Trump continue his hardline approach, or will he seek cooperation? Time will tell.
It’s also worth noting that 47% of the world’s top AI researchers were born or educated in China. If the US wants to stay competitive, it will have to work with Chinese researchers and innovators. Cooperation may be the only way to avoid an AI arms race that benefits no one.
Lastly, I want to share an investment opportunity related to Trump’s return to the White House. Gold mining stocks often perform well during pro-business administrations. Nevada Canyon Gold, a company based in my home state, has a unique business model focused on royalties and streaming. Its stock has rebounded significantly since Trump’s election.
Gold prices are rising, and Nevada accounts for 76% of US gold production. The company’s innovative approach avoids the high costs of traditional mining while focusing on steady returns. With Trump’s deregulation policies, Nevada Canyon Gold is poised for growth.
Is DeepSeek free?
Yes, DeepSeek Chat offers free usage with certain limitations. For more details, you can visit its official website.
Who is the founder of DeepSeek?
Was DeepSeek attacked?
One day after launching, the new China-based AI platform DeepSeek was forced to disable registrations for its chat platform due to a large-scale distributed denial of service (DDoS) attack on its infrastructure
Where did Liang Wenfeng go to college?
information and communication engineering from Zhejiang University
How old is DeepSeek?
Founded on may 2023
Deepseek news
Deepseek shock
Chip giant Nvidia shed nearly $600bn in market value after a Chinese AI model cast doubt on the supremacy of US tech firms. DeepSeek R1 is reported to outperform ChatGPT in areas such as logical reasoning, coding, and solving mathematical problems.