Trump warns: China's DeepSeek AI breakthrough a wake-up call for U.S. tech
By isabelle // 2025-01-28
 
  • Trump warns U.S. industries about China’s cheaper AI platform, DeepSeek, calling it a “wakeup call.”
  • DeepSeek reportedly costs a fraction of U.S. competitors, causing Nasdaq and Nvidia stocks to drop sharply.
  • Trump sees the cost efficiency as positive but stresses the need for the U.S. to compete and win in AI.
  • He criticizes the U.S.'s focus on DEI initiatives, which he believes has detracted from technological advancements.
  • Trump calls for a more pragmatic approach to AI and a return to meritocracy to regain a technological edge.
President Donald Trump on Monday sounded the alarm over China's new artificial intelligence (AI) platform, DeepSeek, calling it a "wakeup call" for American industries. Trump, addressing House Republicans, highlighted the potential positive aspects of the cheaper AI technology but emphasized the urgent need for the U.S. to focus on competing and winning in the tech race. The Chinese AI platform, which reportedly costs a fraction of what U.S. competitors spend, has sent shockwaves through the tech industry and financial markets. The Nasdaq Composite slipped more than 3% on Monday, and AI chipmaker Nvidia's stock plummeted by nearly 17%, reflecting investor concerns over the competitive threat.

Lower investment, better results

Trump noted that DeepSeek's developers claim to have spent only $5.6 million to develop their AI, a tiny fraction of the billions invested by leading U.S. firms like OpenAI and Meta. This huge difference in investment has raised questions about the efficiency and effectiveness of U.S. tech spending. “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,” Trump said. “And that’s good because you don’t have to spend as much money. I view that as a positive, as an asset.” However, Trump also warned that the U.S. must be "laser focused on competing to win" in the AI space. He suggested that the U.S. has been falling behind in technology and other fields due to a preoccupation with diversity, equity, and inclusion (DEI) initiatives, which he believes have detracted from scientific and technological advancements.

The impact on the stock market

The market's reaction to DeepSeek's emergence underscores the severity of the threat. High-performance chipmaker Nvidia, a leader in AI hardware, saw its stock tank by almost 17% on Monday, contributing to a 3% drop in the Nasdaq Composite. This volatility highlights the market's sensitivity to global tech competition and the perceived advantage of more cost-effective solutions. “Instead of spending billions and billions, you’ll spend less, and you’ll come up with, hopefully, the same solution,” Trump said, suggesting that the U.S. should take a more pragmatic approach to AI development.

America needs to step up its game

Trump's remarks come as part of a broader strategy to reassert American dominance in tech and other critical industries. He has already taken steps to dismantle what he sees as burdensome regulations imposed by the previous administration, which he believes have hampered U.S. tech innovation. The former president also emphasized the need to reverse the trend of prioritizing DEI over merit, arguing that this practice has weakened the U.S. economy and technological edge. “We are rapidly losing our edge in technology and beyond because the thing that has made this country great — a fully functioning meritocracy — has been severely weakened by ‘woke’ politics...” he said. As the U.S. grapples with the rise of DeepSeek and the broader implications for its tech industry, Trump's call for a renewed focus on competition and meritocracy serves as a sobering reminder of the challenges ahead. Whether the U.S. can regain its technological edge in the face of increasing global competition will depend on its ability to balance innovation, efficiency, and a return to the principles that have historically driven American success. Sources for this article include: NYPost.com NBCNews.com NYPost.com