Big Tech brushes off DeepSeek threat

Leaders of major U.S. tech companies at the forefront of artificial intelligence (AI) are brushing off a popular new intelligence model from Chinese startup DeepSeek, despite fears it could upend the industry.

OpenAI CEO Sam Altman, Meta CEO Mark Zuckerberg and Microsoft CEO Satya Nadella have all appeared largely unconcerned about the new AI model in recent days, even after it sent tech stocks tumbling earlier this week.

DeepSeek claims its new R1 model performs on par with OpenAI's and cost just $5.6 million to train — a measly sum compared to the billions of dollars that American tech firms have spent building out infrastructure to develop AI.

While Altman acknowledged Thursday that DeepSeek “did a couple of really nice things,” he downplayed its overall impact, calling it “wildly overstated.”

“This is a model at a capability level that we had quite some time ago,” he said during an event in Washington, D.C. “We’ve got a sense of what it takes to run a cost-efficient model.”

“I don’t want to diminish the work,” he added. “I think this is a great work, and it’s, in some sense, it’s like the first surprise or new competitor to OpenAI in quite a while.”

During Meta’s fourth-quarter earnings call Wednesday, Zuckerberg voiced confidence in his company’s plans to continue investing heavily in AI infrastructure in the wake of DeepSeek’s emergence.

Meta, Facebook and Instagram’s parent company, announced last week that it plans to spend between $60 billion and $65 billion in 2025 on capital expenditures as it focuses on AI.

“It’s probably too early to really have a strong opinion on what this means for the trajectory around infrastructure and [capital expenditures] and things like that,” Zuckerberg said. “There are a bunch of trends that are happening here all at once.”

He emphasized that even if DeepSeek’s emergence indicates that less computer infrastructure is needed for training, other factors, such as an increase in AI usage, could require this level of investment.

“I continue to think that investing very heavily in [capital expenditures] and [infrastructure] is going to be a strategic advantage over time,” Zuckerberg added. “It’s possible that we’ll learn otherwise at some point, but I just think it’s way too early to call that.”

“And at this point, I would bet that the ability to build out that kind of infrastructure is going to be a major advantage for both the quality of the service and being able to serve the scale that we want to.”

Microsoft’s Nadella also struck a positive tone when discussing DeepSeek during the firm’s earnings call Wednesday. His company announced plans earlier this month to spend $80 billion building out data centers in 2025.

“I think DeepSeek has had some real innovations,” he said. “Obviously, now that all gets commoditized and it's going to get broadly used. And the big beneficiaries of any software cycle like that is the customers, right?”

Several publicly traded tech giants took a beating Monday, as DeepSeek grew in popularity and found itself at the top of Apple’s App Store. Nvidia, whose chips are key to powering the AI boom, was one of the hardest hit, losing $600 billion in value on Monday alone.

President Trump deemed the Chinese AI model a “wake-up call” for American tech firms Monday night, saying they “need to be laser focused on competing to win.” However, he also suggested it could be a “positive development” for the industry.

“Instead of spending billions and billions, you’ll spend less and you’ll come up with, hopefully, the same solution,” he said at his National Doral resort outside Miami, where House Republicans had gathered for their annual policy retreat.

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