U.S. Probes Chinese AI App DeepSeek Over Security and Innovation Threats

The U.S. government is examining the national security risks posed by the Chinese AI app DeepSeek, White House press secretary Karoline Leavitt announced. The National Security Council is reviewing its implications, calling it a "wake-up call" for the American AI industry. This follows President Donald Trump's statement urging U.S. companies to remain competitive and ensure AI dominance.

Investor concerns over DeepSeek's low-cost model triggered a global tech stock sell-off, threatening market leaders like OpenAI and Google (NASDAQ:GOOGL). Trump highlighted the need for innovation, noting that China's advancements should motivate U.S. companies to develop faster and more cost-efficient solutions.

David Sacks, Trump's AI and crypto advisor, suggested potential intellectual property theft linked to DeepSeek, referencing "distillation," an AI technique where one model learns from another. He anticipates measures by U.S. AI companies to prevent similar practices.

Efforts to curb China's AI growth align with former President Joe Biden's export restrictions on AI chips and manufacturing equipment. Trump's administration has continued this strategy, with the Commerce Department blocking shipments from companies like Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD).

Despite challenges, Trump acknowledged China's innovations as a positive push for U.S. industries, emphasizing the brilliance of American scientists. He encouraged companies to streamline spending while maintaining leadership in AI development.

Howard Lutnick, Trump’s Commerce Department nominee, is set for a hearing on Wednesday as the administration intensifies its stance on safeguarding American AI interests.

This escalating competition underscores the global race for AI dominance, with the U.S. striving to stay ahead in innovation and security.