US President Donald Trump said that the release of DeepSeek's latest model "should be a wakeup call for our industries that we need to be laser-focused on competing to win."

DeepSeek open-sourced a model with similar performance to OpenAI's o1, with the Chinese company claiming it was developed using a comparatively small number of lower-powered GPUs.

This spooked investors, undermining the argument that US AI leaders could keep building ever larger data centers to maintain an edge. Nvidia, Microsoft, Schneider Electric, and others saw their valuations plummet, with as much as $2 trillion wiped off the market.

"I've been reading about China and some of the companies in China, one in particular coming up with a faster method of AI and much less expensive method, and that's good because you don't have to spend as much money. I view that as a positive, as an asset," Trump said during an appearance in Florida.

"I view that as a positive because you'll be doing that too, so you won't be spending as much, and you'll get the same result, hopefully.

"We always have the ideas. We're always first. So I would say that's a positive that could be very much a positive development. So instead of spending billions and billions, you'll spend less, and you'll come up with, hopefully, the same solution."

Trump did not reference the hundreds of billions he announced last week for the Stargate Project, OpenAI's data center initiative to spend $500bn on US data centers. The project is thought to have raised about $45bn to date.