Latest DeepSeek updates as Trump issues warning after AI market turmoil

Leading AI chip maker Nvidia dropped 17% at the start of the week, pulling US stocks down in what president Donald Trump said was a "wake-up call" for US tech.

The Icon for the smartphone apps DeepSeek is seen on a smartphone screen in Beijing, Tuesday, Jan. 28, 2025. (AP Photo/Andy Wong)
DeepSeek has rocked the tech world this week. (AP)

The US and European share markets steadied on Tuesday after a rout over the previous 24 hours sparked by the emergence of low-cost Chinese artificial intelligence model DeepSeek

China's new AI model shot to the top of the UK's app download charts, and sent shockwaves into the stock market as shares in Silicon Valley companies dropped off the back of the DeepSeek R1 release.

Leading AI chip maker Nvidia dropped 17% at the start of the week, pulling US stocks down in what president Donald Trump said was a "wake-up call" for US tech companies. In a sign that Tuesday might be a little calmer, Nvidia rose around 5% in premarket trading.

DeepSeek's AI works in a similar way to other chatbots, but its offer comes at a much lower cost than other AI chat models. Its emergence has made investors question the dominance of AI tech giants.

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Read below for the key developments from our media partners, or click the headline to skip ahead:

> US, European markets stead after dramatic sell-off

> Trump warns new Chinese DeepSeek AI is a ‘wake up call’

> 'DeepSeek worked well, until we asked it about Tiananmen Square'

> Viral Chinese AI app not working due to ‘malicious attacks’

> How the US may have unintentionally helped create an AI monster

> China’s gamechanging AI system has big implications for UK tech

Television graphics are seen in the window of Nasdaq headquarters in Times Square, as Nasdaq fell nearly 4 percent this morning on January 27, 2025 in New York City. European and Asian stock markets mostly slid Monday and Wall Street was forecast to open sharply lower on talk that a cheaper Chinese generative AI program, DeepSeek, can outperform big-name rivals, notably in the United States. (Photo by Bryan R. SMITH / AFP) (Photo by BRYAN R. SMITH/AFP via Getty Images)
Chinese generative AI program, DeepSeek sent shockwaves into the stock market. (Getty Images)

US stock futures and European shares steadied on Tuesday, after the previous day's dramatic, tech-led selloff, and traders walked back some moves to safe-haven government bonds, though investors across asset classes remained jittery.

Chipmaker Nvidia dived 17% on Monday, wiping off nearly $593 billion in the biggest one-day market capitalisation loss in history, and the Philadelphia semiconductor index .SOX, down 9.2%, suffered its biggest loss since March 2020,

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Read more from Reuters.

President Donald Trump speaks to reporters aboard Air Force One en route from Miami to Joint Base Andrews, Md., Monday, Jan. 27, 2025. (AP Photo/Mark Schiefelbein)
President Donald Trump said DeepSeek was a wake=up call for US tech. (AP)

Donald Trump has praised China's new AI breakthrough as a "wake-up call" for American tech firms that ultimately "could be good" for the U.S.

Known as R1, the model reportedly beats rivals such as Meta and ChatGPT creator OpenAI in several key metrics while costing just a fraction to train and develop.

Read more from The Independent.

We asked DeepSeek’s AI questions about topics historically censored by the great firewall. Here’s how its responses compared to the free versions of ChatGPT and Google’s Gemini chatbot.

Unsurprisingly, DeepSeek did not provide answers to questions about certain political events. When asked the following questions, the AI assistant responded: “Sorry, that’s beyond my current scope. Let’s talk about something else.”

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Read the full story from The Guardian.

Viral Chinese AI app DeepSeek has stopped working amid what appears to be a technical issue

A banner on the app’s web chat also said that DeepSeek’s “online services have faced large-scale malicious attacks”, though it did not say who it believed those attacks to have come from.

Read more from The Independent.

SUQIAN, CHINA - JANUARY 27, 2025 - Illustration DeepSeek, Suqian, Jiangsu, China. 27th Jan, 2025. (Photo by CFOTO/Sipa USA) Credit: Sipa US/Alamy Live News
DeepSeek was the most downloaded app in the UK this week. (Alamy)

The US government has for years actively tried to curb China's access to semiconductor chips, a key component in generative AI models. Instead, those export limits may have fuelled the innovation that led to DeepSeek's R1 — a large language model that's disrupting the domestic AI industry and the booming economy built around it.

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Brian Colello, a tech analyst for Morningstar, said the quote "constraints lead to creativity" came to mind.

"These Chinese models were processor-constrained, so it led to some creative techniques in training, and the DeepSeek model has come out with better-than-expected performance given the processors that it's been trained on," he told Business Insider.

Read more from Business Insider.

DeepSeek’s rise is an excellent example of strategic foresight and execution. It doesn’t merely aim to improve existing models, but redefines the very boundaries of how AI could be developed and deployed – while demonstrating efficient, cost-effective approaches that can yield astounding results. The UK should adopt a similarly ambitious mindset, focusing on areas where it can set global standards rather than playing catch-up.

Read more from The Conversation