US Markets React to Rising Chinese AI Threat (Full Transcript)

Speaker 1: Technology shares on Wall Street have fallen sharply in response to the emergence of a low-cost chatbot built by a Chinese artificial intelligence firm. The chatbot launched by the Chinese firm DeepSeek, which itself has said that within the last hour or so it's been hit by a large-scale malicious cyber attack, has become the most downloaded free app in the United States since it was launched earlier this month. Let's speak to our North America business correspondent, Michelle Fleury. So, the new kid on the block has stolen a march on its rivals, Michelle.

Speaker 2: Look, I mean, I think this is a company that has sent shockwaves through Silicon Valley and through Wall Street right now. What has happened is that essentially a made-in-China AI model developed by this company, DeepSeek, has shown that it can create something that is similar in terms of proficiency as its rivals, American rivals like OpenAI's ChatGPT. But it was done using inferior chips, so chips with less power, and it uses less data. And it is those facts that really have created this kind of shockwave through financial markets, in part because companies like NVIDIA, which makes AI chips, they have seen their share prices over the last year or so rise and rise, pushing it into a trillion-dollar company on the basis of the fact that because we expect AI to grow so much, there's going to be this huge demand for chips. Now you've got Wall Street reconsidering that, and you've got Silicon Valley also nervous that perhaps America won't be the dominant player in AI, in the sort of race to kind of dominate this technology.

Speaker 1: But now DeepSeek saying that they are under attack.

Speaker 2: Yeah, I mean, you know, the twists and turns of a company that many people had never heard of up until the last 24 hours. Suddenly we're learning that the company, if you look at their website, they're basically saying they're not accepting any more registrations from new users because they are suffering from a cyber attack. We don't have any more details about that at the moment. But obviously it comes at a time when the spotlight has been on it because of the sort of ramifications I was just telling you about in terms of Wall Street and across Silicon Valley. Add to all of this, of course, we've got a new Trump administration, the White House. They're unlikely to be too happy about what's been going on, in part because Donald Trump, since he's taken office, has been talking about AI as something he really cares about and wants America to be a leader in. And so the idea that there is this sort of a real challenger out there obviously is not something the White House is likely to be pleased about.