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Trump warns of 'wake-up call' as low-cost Chinese AI jolts sector

File Photo (Photo by Jim WATSON / AFP)
28 Jan 2025 10:06

SAN FRANCISCO (AFP)

Fears of upheaval in the AI gold rush rocked Wall Street on Monday following the emergence of a popular ChatGPT-like model from China, with US President Donald Trump saying it was a "wake-up call" for Silicon Valley.

Last week's release of the latest DeepSeek model initially received limited attention, overshadowed by the inauguration of Trump on the same day.

However, over the weekend, the Chinese artificial intelligence startup's chatbot surged to become the most downloaded free app on Apple's US App Store, displacing OpenAI's ChatGPT.

What truly rattled the industry was DeepSeek's claim that it developed its latest model, the R1, at a fraction of the cost that major companies are investing in AI development.

The development is significant given the AI boom, ignited by ChatGPT's release in late 2022, has propelled Nvidia to become one of the world's most valuable companies.

Trump reacted quickly on Monday, saying the DeepSeek release "should be a wake-up call for our industries that we need to be laser-focused on competing to win."

He argued that it could be a "positive" for US tech giants, adding: "instead of spending billions and billions, you'll spend less, and you'll come up with hopefully the same solution."

OpenAI chief executive Sam Altman said in a post on X that it was "legit invigorating to have a new competitor."

He called DeepSeek's R1 "an impressive model, particularly around what they're able to deliver for the price," and pledged to speed up some OpenAI releases.

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