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| Trump says China’s DeepSeek AI chatbot is a ‘wake-up call’ | Trump says China’s DeepSeek AI chatbot is a ‘wake-up call’ |
| (31 minutes later) | |
| Emergence of cheaper Chinese rival has wiped $1tn off the value of leading US tech companies | |
| Donald Trump has said that the launch of a chatbot by China’s DeepSeek is a “wake-up call” for US tech firms in the global race to dominate artificial intelligence. | |
| The emergence of DeepSeek, which has built its R1 model chatbot at a fraction of the cost of competitors such as OpenAI’s ChatGPT and Google’s Gemini, wiped $1tn (£800bn) in value from the leading US tech index on Monday. | The emergence of DeepSeek, which has built its R1 model chatbot at a fraction of the cost of competitors such as OpenAI’s ChatGPT and Google’s Gemini, wiped $1tn (£800bn) in value from the leading US tech index on Monday. |
| Nvidia, a leading maker of computer chips that has experienced explosive growth amid the AI boom, had $600bn wiped off its market value in the biggest one-day fall in US stock market history. | |
| “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,” said Trump. | “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,” said Trump. |
| He pointed to DeepSeek’s ability to apparently deliver the same performance as existing AI models with far fewer resources, threatening the dominance of the US-led AI boom. | |
| “That’s good because you don’t have to spend as much money,” Trump said. “I view that as a positive, as an asset.” | “That’s good because you don’t have to spend as much money,” Trump said. “I view that as a positive, as an asset.” |
| On Monday, the DeepSeek assistant surpassed ChatGPT in downloads from Apple’s app store. | On Monday, the DeepSeek assistant surpassed ChatGPT in downloads from Apple’s app store. |
| Sam Altman, the chief executive of OpenAI, said he was impressed with DeepSeek but the US industry would speed up development. | Sam Altman, the chief executive of OpenAI, said he was impressed with DeepSeek but the US industry would speed up development. |
| “DeepSeek’s R1 is an impressive model, particularly around what they’re able to deliver for the price,” he said. “We will obviously deliver much better models and also it’s legit invigorating to have a new competitor. We will pull up some releases.” | “DeepSeek’s R1 is an impressive model, particularly around what they’re able to deliver for the price,” he said. “We will obviously deliver much better models and also it’s legit invigorating to have a new competitor. We will pull up some releases.” |
| The DeepSeek-fuelled stock market fall seen in the US spread to Asia on Tuesday as Japan’s Nikkei share average fell 1.3%. | |
| Japanese-listed tech stocks fell, as the manufacturer Advantest was down 11%, Tokyo Electron off almost 6% and Disco Corporation dropped nearly 3%. Stock in the tech investor SoftBank fell more than 5%. | |
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| Most other big Asian markets were shut for the lunar new year holiday. | |
| Marc Andreessen, a leading US venture capitalist, compared the launch of DeepSeek’s R1 model on Monday to a pivotal moment in the US-USSR space race, posting on X that it was AI’s “Sputnik moment” – referring to when the Soviet Union astounded its cold war rival by launching a satellite into orbit. | Marc Andreessen, a leading US venture capitalist, compared the launch of DeepSeek’s R1 model on Monday to a pivotal moment in the US-USSR space race, posting on X that it was AI’s “Sputnik moment” – referring to when the Soviet Union astounded its cold war rival by launching a satellite into orbit. |
| According to DeepSeek, its R1 model outperforms OpenAI’s o1-mini model across “various benchmarks”, while research by Artificial Analysis puts it above models developed by Google, Meta and Anthropic in terms of overall quality. | According to DeepSeek, its R1 model outperforms OpenAI’s o1-mini model across “various benchmarks”, while research by Artificial Analysis puts it above models developed by Google, Meta and Anthropic in terms of overall quality. |
| The company was founded by the entrepreneur Liang Wenfeng, who runs a hedge fund, High-Flyer Capital, that uses AI to identify patterns in stock prices. Liang reportedly started buying Nvidia chips in 2021 to develop AI models as a hobby, bankrolled by his hedge fund. In 2023, he founded DeepSeek, which is based in the eastern Chinese city of Hangzhou. | The company was founded by the entrepreneur Liang Wenfeng, who runs a hedge fund, High-Flyer Capital, that uses AI to identify patterns in stock prices. Liang reportedly started buying Nvidia chips in 2021 to develop AI models as a hobby, bankrolled by his hedge fund. In 2023, he founded DeepSeek, which is based in the eastern Chinese city of Hangzhou. |
| The company is focused purely on research rather than commercial products – the DeepSeek assistant and underlying code can be downloaded for free, while its models are also cheaper to operate than OpenAI’s o1. |