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

DeepSeek's debut 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 plummet—a record on Wall Street. Microsoft, Meta Platforms, Alphabet (Google's parent company), and Dell Technologies also experienced declines, ranging from 2.1% to 8.7%.

Although this claim is contested, DeepSeek has raised concerns about the billions invested in AI by American tech giants, unnerving investors. Its popularity surged, reaching the top of the U.S. free app download charts, fueled by growing discussions surrounding its efficacy.

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 access undercuts the expensive subscription models of competitors, potentially disrupting established business models and valuations.

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

Despite DeepSeek's impact, Nvidia retains 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.