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

DeepSeek's emergence triggered a sharp decline 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 plunge—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 faces some scrutiny, DeepSeek has fueled questions about the massive AI investments of American tech giants, unsettling investors. Its popularity surged, reaching the top of U.S. free app download charts amidst growing discussions about its performance.

Sheldon Fernandez, DarwinAI co-founder, 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 added that DeepSeek's free accessibility undercuts the business models underpinning the high valuations of many established companies.

Trump, however, offered a more optimistic perspective, suggesting DeepSeek could be beneficial for the U.S. by potentially reducing 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 already braving cold weather to camp outside stores.