Stocks plunged Monday amid growing concerns that China was achieving rapid advances in AI at a fraction of the cost of America's big tech companies and frontier labs.
Markets were perhaps not reassured by the sight of Trump, who had insisted he would be too busy this weekend to hit the links, starting a massive diplomatic crisis with Colombia while golfing on Sunday.
Meanwhile, egg prices are surging and rains in L.A. created new mudslide dangers as fires continued to rage.
"Rout" on Wall Street
What CNBC called "an artificial intelligence stock rout" saw Wall Street darlings like chipmaker Nvidia and Constellation Energy plunge in value, with Nividia alone losing almost half a trillion in value in the first-hour of trading, and Constellation down more than 16%. (Constellation is the company working with Microsoft to restart the Three Mile Island nuclear plant outside Harrisburg, Pennsylvania.)
The AI boom of the past two years has seen the "Magnificent 7" group of stocks sustain the S&P 500's performance. But the emergence of low-cost Chinese startup DeepSeek—which rocketed past ChatGPT to the top spot on the App store—now "threatens the American exceptionalism premium on US stocks," says CNBC.
Less than a week after Trump's inauguration, US power stocks plunged as DeepSeek's new model "led investors to question how much energy artificial intelligence applications will actually consume."
As the UK's conservative Daily Telegraph put it, the success of DeepSeek is humiliating the US and "could undermine Trump."
As Matt Stoller writes in the BIG newsletter:
DeepSeek’s accomplishment is... terribly embarrassing, and also threatening for big tech and the American security apparatus. The presumption was that raw computing power is a competitive barrier in AI, these new models suggest it may not be as much as we thought. Meanwhile, short-sellers are salivating.
Trump has already gambled much of his presidency on the advice and (possibly drug-induced) sci-fi visions and crypto scams of the likes of not-just-a-tech fascist Elon Musk and Musk's "Mini-Me" David Sacks.
The Mump Regime has already softened its stance on China to accommodate Musk's business interests.
But Trump's inflationary tariffs might be back on the table if China continues to humiliate the US in AI, a sector Trump vowed to "dominate."
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