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

DeepSeek's emergence triggered a sharp downturn in AI-focused company stocks. Nvidia, a leading GPU provider crucial for AI model operation, 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 disputed by some, DeepSeek has prompted scrutiny of the massive investments American tech firms are pouring into AI, unsettling investors. Its popularity surged, reaching the top of the U.S. free app download charts amidst 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 the disruption to existing business models, noting the potential for free access to features previously requiring substantial monthly subscriptions.

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

Despite the impact of DeepSeek, Nvidia maintains a $2.90 trillion valuation. The company is poised to launch its highly anticipated RTX 5090 and RTX 5080 GPUs later this week, generating significant consumer demand.