Nigel Green
DeepSeek, a Chinese artificial intelligence startup, has shaken global markets and disrupted long-held assumptions about the effectiveness of tariffs as a tool for economic dominance.
Its breakthrough—a cost-effective AI model that operates on less-advanced chips—highlights a critical challenge for the United States: tariffs and other economic restrictions like chip bans may no longer be enough to contain and outpace technological competitors like China.
Revelations about DeepSeek’s low-cost success in the high-cost AI space rocked global technology stocks on Monday, with Nvidia’s shares down 9% in premarket trading and Dutch high-end chip equipment maker ASML down as much as 11%, according to breaking news reports.
Bloomberg reported the hitherto largely unheard-of startup’s AI assistant has rocketed to the top of the app download charts since it was released last week with capabilities widely seen as competitive with the likes of OpenAI, Google and Meta’s AI offerings. That, in turn, has called into question America’s supposed large lead over China in the AI race.
Meanwhile, President Trump’s recent threat to impose tariffs as high as 60% on imports underscores Washington’s reliance on economic restrictions to maintain its global tech standing. For years, tariffs have been a cornerstone of US efforts to curb China’s rise and preserve dominance in key tech and other industries.
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