US President Donald Trump has called the rise of Chinese company DeepSeek "a wake-up call" for the US tech industry, after the emergence of its artificial intelligence (AI) model triggered shockwaves on Wall Street.
Responding to the news on Monday, Trump said the latest developments in China's AI industry may be "a positive" for the US, News.Az reports, citing foreign media.Shares in major tech firms like Nvidia fell sharply, with the chip giant losing almost $600bn (£482bn) in market value.
What has shaken up the industry is DeepSeek's claim that its R1 model was made at a fraction of the cost of its rivals - raising questions about the future of America's AI dominance and the scale of investments US firms are planning.
DeepSeek has become the most downloaded free app in the US just a week after it was launched.
"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 told reporters on board Air Force One.
He also said he was not concerned about the breakthrough, adding the US will remain a dominant player in the field.
On Tuesday, shares in Japanese AI-related firms including Advantest, Softbank and Tokyo Electron fell sharply, helping to push the benchmark Nikkei 225 down by around 1%.
Several other markets in Asia are closed for the Lunar New Year holiday.
Mainland China's financial markets will be shut from today and will reopen on 5 February.
Stock exchanges in major chip producing countries Taiwan and South Korea are also closed today.
DeepSeek is powered by the open source DeepSeek-V3 model, which its researchers claim was trained for around $6m (£4.2m) - significantly less than the billions spent by rivals. But this claim has been disputed by others in AI.
Its emergence comes as the US is restricting the sale of the advanced chip technology that powers AI to China.
To continue their work without steady supplies of imported advanced chips, Chinese AI developers have shared their work with each other and experimented with new approaches to the technology.
This has resulted in AI models that require far less computing power than before.
It also means that they cost a lot less than previously thought possible, which has the potential to upend the industry.
