There is major competition now.
On January 27, President Donald Trump addressed a gathering of Republican lawmakers at the Trump Doral National resort in Miami, warning that Chinese artificial intelligence (AI) company DeepSeek could pose a significant disruption to the industry. He emphasized the need for U.S. industries to focus on competing, highlighting the country’s strength in AI innovation. Trump was surprised by the breakthrough achieved by DeepSeek, which had developed a more efficient and cost-effective method for training and processing AI, noting that such advancements were usually expected to come from the U.S.
DeepSeek, founded in 2023 by Liang Wengfeng, is an open-source language model that rivals some of the top proprietary models in the market. The company claimed to have spent only $6 million on training its model, significantly less than the $100 million or more typically spent on similar models in the U.S. While these claims remain unverified, Trump expressed cautious optimism about the potential for U.S. companies to leverage similar technology, stressing that it could lead to cost savings without sacrificing quality.
The announcement of DeepSeek’s advancements caused a stir in the tech sector, with notable financial repercussions. Nvidia, a leader in AI technology, saw its stock drop by nearly 17%, losing $589 billion in market value in just one day. Other companies in the sector, including Broadcom and Vertiv, also experienced significant declines. Meanwhile, DeepSeek faced cyberattacks and an overwhelming surge in registrations, prompting the company to limit its activity.
In response to the potential impact of foreign technological developments, some lawmakers are urging greater attention to trade and national security concerns, particularly regarding China. Speaker Mike Johnson emphasized the need to address China’s trade practices, accusing the country of intellectual property theft. He also pointed out the growing threat posed by China’s advancements in AI, particularly in light of the new developments from DeepSeek.
There are also concerns regarding the political bias of DeepSeek’s AI, with reports suggesting that the model’s responses favor the Chinese Communist Party. Analysis found that, unlike other AI models like ChatGPT, DeepSeek often provided brief, state-controlled media-like answers, avoiding sensitive topics such as human rights. Despite these concerns, Trump remains committed to ensuring that the U.S. maintains its leadership in AI, announcing significant private industry investments in AI infrastructure.
