Donald Trump has called China's new AI model, DeepSeek, a "wake-up call" for the U.S. tech sector following Nvidia's massive market value decline of nearly $600 billion.

DeepSeek's emergence triggered a sharp downturn in AI-focused company stocks. Nvidia, a major GPU supplier for AI, suffered the most significant blow, experiencing a 16.86% share drop – a record on Wall Street. Microsoft, Meta Platforms, Alphabet (Google's parent company), and Dell Technologies also saw declines ranging from 2.1% to 8.7%.

Although this claim is contested, DeepSeek has raised concerns about the massive AI investments of American tech giants, unnerving investors. Its popularity surged, reaching the top of the U.S. free app download charts amid growing discussions about its performance.

Sheldon Fernandez, co-founder of DarwinAI, commented to CBC News, stating that DeepSeek "performs as well as, and in some cases better than, leading Silicon Valley models, but with a fraction of the resources." He further highlighted that DeepSeek's free accessibility disrupts the business models underpinning the high valuations of many established AI companies.

President Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the U.S. by reducing development costs while achieving comparable results. He expressed confidence in the U.S.'s continued AI dominance.

Despite DeepSeek's impact, Nvidia remains a $2.90 trillion company. The company's highly anticipated RTX 5090 and RTX 5080 GPUs are set for release later this week, generating such high demand that consumers are braving cold weather to camp outside stores.