Trump says China’s DeepSeek AI ‘should be a wake-up call’ for American tech companies

President Donald Trump said Monday that the sudden rise of Chinese AI app DeepSeek “should be a wake-up call” for America’s tech companies, as the runaway popularity of yet another Chinese app presented new questions for the administration and congressional leaders. 

Trump said that he still expected U.S. tech companies to dominate artificial intelligence, but he acknowledged the challenge posed by DeepSeek, a low-cost AI assistant that rose to No. 1 on the Apple app store over the weekend. 

“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,” he said while traveling in Florida. 

DeepSeek is causing a panic within U.S. tech companies and in the stock market because it has performed well in tests compared to competing AI models from Meta and OpenAI, while it was developed at a much lower cost, according to the little-known Chinese startup behind DeepSeek. 

Trump said he considered the low-cost model to be “very much a positive development” for AI overall because “instead of spending billions and billions, you’ll spend less, and you’ll come up with, hopefully, the same solution.” 

DeepSeek is the latest in a series of Chinese apps to surge in popularity in the U.S. in recent weeks. Americans embraced Chinese apps RedNote and Lemon8 as alternatives to TikTok, when TikTok was on the verge of being banned temporarily in the U.S. for its own links to China. 

TikTok went dark for less then a day and came back online for existing users after Trump delayed enforcement of a bipartisan law requiring either a new non-Chinese owner or a ban. TikTok, though, remains unavailable for new downloads from the Apple and Google app stores.

Security experts have expressed concern about TikTok and other apps with links to China, including from a privacy standpoint. 

Last week, Trump signed an executive order undoing certain Biden administration rules about AI development that Trump said had held the industry back. 

It wasn’t immediately clear, though, what new AI policies, if any, the Trump administration or Congress might pursue in response to DeepSeek’s rise. 

Rep. John Moolenaar, R-Mich., the chair of the House Select Committee on China, said Monday he wanted to see the U.S. act to slow down DeepSeek, going further than Trump did in his remarks. 

“DeepSeek — a new AI model controlled by the Chinese Communist Party — openly erases the CCP’s history of atrocities and oppression,” he said, referring to reports that DeepSeek censors topics such as Tiananmen Square. 

“The U.S. cannot allow CCP models such as DeepSeek to risk our national security and leverage our technology to advance their AI ambitions. We must work to swiftly place stronger export controls on technologies critical to DeepSeek’s AI infrastructure,” he said. 

DeepSeek’s developers say they created the app despite existing U.S. controls on the export of high-performing semiconductors, leading to a vigorous online debate Monday about how effective those controls have been and what their future should be. 

Sen. Mark Warner, D-Va., defended existing export controls related to advanced chip technology and said that more regulation might be needed. 

“While I think there’s more to learn about DeepSeek’s development activities, what’s in the public record reveals that the PRC continues [to] prioritize advancement in AI and that export control alone will not stymie their efforts,” he said. 

“Claims that export controls have proved ineffectual, however, are misplaced: DeepSeek’s efforts still depended on advanced chips, and PRC hyperscalers’ efforts to build out worldwide cloud infrastructure for deployment of these models is still heavily impacted by U.S. controls,” he said. 

House Speaker Mike Johnson, R-La., called DeepSeek “a serious threat” and said China had been a “terrible trading partner.” 

“They abuse the system. They steal our intellectual property. They’re now trying to get a leg up on us on AI, as you’ve seen the last day or so,” he said. “It’s a serious threat to us and to our economy and our security in every way. So the president takes that seriously, and I think that he will deal with that [in an] appropriate manner.” 

David Sacks, Trump’s White House AI and cryptocurrency czar, said in a post on X that DeepSeek’s success “shows that the AI race will be very competitive.” He also said that former President Joe Biden had “hamstrung” American AI companies with a previous executive order on the subject. 

“I’m confident in the U.S. but we can’t be complacent,” he wrote.

Kevin Breuninger, CNBC and Katherine Doyle contributed.