President Donald Trump said the Chinese AI startup DeepSeek's ability to train AI more cheaply is a "positive" development and should be a "wake-up call" for tech industries.
Trump's comments followed DeepSeek's ascension to the top of Apple's free downloads chart, which sent shockwaves through the US tech market on Monday morning.
"So you won't be spending as much, and you'll get the same result hopefully," Trump said Monday evening in a House Republican members conference meeting. "The release of DeepSeek, AI from a Chinese company, should be a wake-up call for our industries that we need to be laser-focused on competing to win."
China has been heavily investing in its tech sector, with state-backed initiatives to boost domestic chip production and AI capabilities, aiming to reduce reliance on US technology.
Meanwhile, the US has expanded the existing export controls on advanced semiconductor technology to China, adding dozens more types of chips and 140 entities to the restriction list.
Last Tuesday, Trump announced the launch of the Stargate Project, a joint artificial intelligence venture with OpenAI, Oracle, SoftBank, and investment firm MGX. The initiative plans to invest up to $500 billion in AI infrastructure across the United States by 2029, with the first data center already under construction in Texas.
Last week, Trump called the project a "monumental undertaking" in a press conference with Larry Ellison and Sam Altman, and touted that it will create 100,000 jobs.
Experts told Business Insider that DeepSeek challenges the idea of US tech dominance, but that may be positive for the future of AI.
Chris Tang, a UCLA professor and global supply chain scholar, called this moment a "trigger" that may motivate OpenAI or Gemini to open up their source code to allow more people to participate in AI development.
"It's still very much early in the game," said Zongyuan Zoe Liu, senior fellow for China studies at the Council on Foreign Relations, "but it certainly serves as a good reminder for American policymakers that technology restriction may not work."
Gadjo Sevilla, a senior tech analyst for AI and tech briefings with BI's sister site EMARKETER, wrote that there is potential for "a race to the bottom for AI pricing and adoption in the coming months," which "runs counter to US Big Tech initiatives where we have Microsoft ($80 billion) and Meta (65 billion) looking to spend on hardware, data centers, and sustainable energy for AI."
"China is not going to slow down. They will do as much as they can with what they can," said Brian Colello, an equity strategist for Morningstar. "It's just such a fast-changing space. Nobody has a clear, sustainable lead, so there will be more breakthroughs and they could come from anywhere. It could come from the US, it could come from China."
