DeepSeek Emergence Comes as Trump Focuses on AI in his First Days in Office

Published: January 31, 2025
  • Trump announced a private sector investment of up to $500 billion to fund infrastructure for artificial intelligence
  • An executive order revokes the Biden Administrations policies that acted “as barriers to American AI innovation”

President Donald Trump focused on investing in artificial intelligence (AI) in order to have the U.S. be a world leader on the technology in his first days in office—underscored by the success of an offering backed the Chinese government at a fraction of the price.

Trump on Jan. 22 announced a private sector investment of up to $500 billion to fund infrastructure for artificial intelligence, aiming to outpace rival nations in the business-critical technology. ChatGPT’s creator OpenAI, SoftBank and Oracle are part of joint venture called Stargate that plans to build data centers and create more than 100,000 jobs in the U.S.

SoftBank CEO Masayoshi Son will be the chairman of Stargate, while semiconductor company Arm, Microsoft and NVIDIA will be key initial technology partners.

Stargate Details

These companies, along with other equity backers of Stargate, have committed $100 billion for immediate deployment, with the remaining investment expected to occur over the next four years.

Oracle Chairman Larry Ellison said the first of the project’s 20 data centers are already under construction in Texas, half a million square feet each.

“What we want to do is we want to keep it in this country,” Trump said of AI, noting that China is a major competitor in the industry.

Musk Reaction

There was one surprise critic of Stargate—Elon Musk, a top adviser and backer of Trump in his re-election bid. “They don’t actually have the money,” Musk claimed in post on his social platform, X. “SoftBank has well under $10B secured. I have that on good authority.”

That led to a back-and-forth with OpenAI CEO Sam Altman. The two have previously clashed as Musk and his AI startup, xAI, have sued OpenAI, alleging breach of contract. While that suit was dropped, Musk in August sued Altman in federal court.

The Stargate announcement was followed by an executive order from President Trump revoking the Biden Administrations policies his order says “act as barriers to American AI innovation.”

Trump Executive Order

The new order sets out to track down and review “all policies, directives, regulations, orders, and other actions taken” as a result of former President Joe Biden’s AI executive order of 2023, which Trump rescinded in his first day of office. Any of those Biden-era actions must be suspended if they don’t fit Trump’s new directive that AI should “promote human flourishing, economic competitiveness, and national security.”

Last year, the Biden administration issued a policy directive that said U.S. federal agencies must show their artificial intelligence tools aren’t harming the public, or stop using them. Much of Biden’s 2023 order set in motion a sprint across government agencies to study AI’s impact on everything from cybersecurity risks to its effects on education, workplaces and public benefits, with an eye on ensuring AI tools weren’t harming people.

The Trump order stated the Biden Administration had “established unnecessarily burdensome requirements for companies developing and deploying AI that would stifle private sector innovation and threaten American technological leadership.”

Additionally, Trump called for the development of an AI action plan within 180 days that will be led by venture capitalist and former PayPal executive David Sacks.

DeepSeek Emergence

But the AI market was upended by the Jan. 20 release of DeepSeek’s AI assistant R1 model. A year-old Chinese start-up whose free, open-source AI model, R1, is considered more or less on par with advanced models from American tech giants, according to analysts — and it reportedly was built for a fraction of the cost.

Company officials said it trained on Nvidia’s lower-capability H800 processor chips using under $6 million and demands far less data center power to run, prompting investors to question huge spending plans by leading AI firms in the United States.

Vantiq CEO Marty Sprinzen characterized DeepSeek’s announcement this week is a “game-changer for the AI industry,” showing that building advanced AI models does not have to be done at hundreds of billions of dollars.

“Here’s why this is important: This isn’t just innovation—it’s an invitation to fundamentally rethink how AI is developed and how generative AI is deployed,” said Sprinzen. “DeepSeek’s breakthrough makes AI more accessible, whether at the edge—like drones—or in the cloud, unlocking possibilities we’ve only imagined until now…With the costs of AI innovation dramatically reduced, the path to creating impactful, life-saving solutions has never been clearer.”

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