The unveiling of DeepSeek-R1, a groundbreaking AI model, has sent shockwaves through Wall Street, causing significant disruptions in the tech sector. Nvidia, the leading chipmaker for AI applications, saw its market value drop by nearly $600 billion (£482 billion) after DeepSeek revealed that its model was developed at a fraction of the cost compared to major U.S. rivals.
The unexpected announcement has sparked concerns about the future of America’s AI dominance and the financial demands required to stay competitive in the rapidly evolving industry.
Speaking aboard Air Force One, former U.S. President Donald Trump adopted a measured stance, stating, “If you could do it cheaper, if you could do it [for] less [and] get to the same end result, I think that’s a good thing for us.” He expressed confidence that the U.S. would maintain its leadership in AI development despite the disruption.
DeepSeek, powered by its open-source DeepSeek-V3 model, claimed its researchers trained the system for approximately $6 million (£4.2 million)—a stark contrast to the billions invested by companies like OpenAI and Google DeepMind. However, industry analysts have raised questions about the credibility of these claims, fueling further debate over the future of AI innovation and competition.
