DeepSeek's launch of its R1 AI model has rattled the US tech industry, with notable declines in US firms' stock prices. President Trump referred to this development as a wake-up call, emphasizing a potential positive shift due to cheaper production costs. The R1 model quickly became a popular app, raising concerns about its implications for American AI leadership and investment strategies. While claims about the cost-effectiveness of DeepSeek's technology are contested, they highlight the competitive pressures facing US companies amid evolving global dynamics.
Shares in major tech firms like Nvidia fell sharply, with the chip giant losing almost $600bn in market value after DeepSeek's launch.
Trump commented that DeepSeek's cheaper AI model could be a 'positive' for the US, suggesting cost-effective solutions benefit competition.
DeepSeek's R1 model has become the most downloaded free app in the US within just a week, highlighting its rapid market acceptance.
DeepSeek's claim of achieving results for around $6m contrasts sharply with the billions spent by its competitors, raising eyebrows.
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