In January, Chinese AI startup DeepSeek rattled global markets, triggering a nearly $1 trillion selloff in US and European tech stocks. Nvidia alone saw a record $589 billion drop in market value.In Washington, lawmakers are reassessing strategies to counter China’s AI advancements, as Biden’s chip export curbs proved insufficient. David Sacks, Trump’s crypto and AI czar, said DeepSeek shows the global AI race will be very competitive — while blaming the Biden administration for regulation that “hamstrung” AI development.
In the weeks leading up to the DeepSeek frenzy, some of the large companies may have been alluding to flexing their financial muscles even more. Amazon projected spending about $75 billion in capital expenditures in 2024, and more this year, mostly on technology infrastructure like the chips and data centers that power artificial intelligence. Meta said it would invest as much as $65 billion on AI-related projects in 2025. And Microsoft said it would spend $80 billion on AI data centers this fiscal year.
Besides that, DeepSeek’s aggressive pricing strategy has put pressure on big tech companies sparking fear of impending price wars. According to Ilman Shazhaev, Founder & CEO of Dizzaract:
“DeepSeek has handed innovators worldwide the golden recipe for AI model training with its Open-Sourced code. Sanctions help shield US companies as Americans are restricted from using innovations from other countries. Still, OpenAI, Google, xAI, and other AI firms have demand from other countries to worry about. If these firms do not innovate at a considerably competitive speed and for lower costs, consumers in other parts of the world may be forced to adopt the technology from other countries. If this happens, it will set the country back, a development that might dent the key goals of the current administration”.
