It was maybe the best Lunar New Year gift that China could have asked for. And for much of the rest of the world, it appeared out of nowhere.In what has been labelled AI’s “Sputnik moment”, Chinese start-up DeepSeek rocketed up the global app store charts – and wreaked havoc on share markets – with its deeply impressive AI chatbot that is far cheaper, and in some ways technically superior, to US efforts like ChatGPT.Almost no one had heard its name a week ago, but DeepSeek has already prompted soul-searching among AI investors, wiping out an estimated $US1 trillion in value among other AI companies in one day. In the most severe example, AI chipmaker Nvidia set a record for the biggest single-day loss of any company in history.Trump called DeepSeek’s arrival a “wake-up call” for US companies who must focus on “competing to win”.
Credit: Marija ErcegovacDeepSeek’s ascent reportedly deeply rocked Meta chief Mark Zuckerberg, who scrambled to convene four “war rooms” of engineers to figure out how China has managed to produce such a capable chatbot so cheaply.Meta executives remain on high alert, according to technology publication The Information, which cited an anonymous company employee. The engineers are attempting to decipher how DeepSeek’s parent company managed to drastically lower the cost of training and running DeepSeek, and to figure out how Meta can do the same.Executives at ChatGPT maker OpenAI are also fuming, publicly alleging this week that DeepSeek engineers may have improperly harvested its data.The arms race has come quickly, and seemingly all at once. DeepSeek’s emergence came just days after Meta CEO Zuckerberg announced his company would spend as much as $US65 billion on projects related to AI in the coming year, including construction of a large data centre and a ramp-up of AI hiring.Donald Trump with Oracle’s Larry Ellison, Softbank’s Masayoshi Son and Sam Altman of OpenAI.Credit: BloombergAnd that announcement was just days after US President Donald Trump joined executives from ChatGPT maker OpenAI, SoftBank, and Oracle to announce a $US500 billion White House-backed AI infrastructure joint venture – Stargate – that will build dozens of new data centres across the US, in a move designed to defend against China.AI has already cemented its place as the most important technology of the decade, upending industries, economies and daily life at an unprecedented rate. And China’s free, powerful chatbot is threatening to rule the roost.For the newly re-elected Trump – and the entire Western world, including Australia – there’s much at stake.Tech has become core to Trump’s power and his second presidency, and his dalliance with the likes of Elon Musk, Sam Altman and Oracle boss Larry Ellison offers a glimpse of the next four years. It’s a Trump tech “broligarchy”, with the spectre of China now hanging over everything.Trump called DeepSeek’s arrival a “wake-up call” for US com
Deep impact: China’s AI tidal wave hits Trump, and Australia
