Former Google CEO Eric Schmidt described DeepSeek's rise as "a turning point" in the global artificial intelligence (AI) race. 

Schmidt emphasized that China's ability to compete with Big Tech using fewer resources demonstrates the need for the United States to intensify its open-source AI efforts. He called for increased investment in AI infrastructure and initiatives like Stargate, while urging leading research labs to share their training methodologies.

/VCG

DeepSeek is a Chinese AI company founded in 2023. In January 2025, the company released its latest model, DeepSeek-R1, which has attracted significant attention for its advanced reasoning capabilities.

The model is said to have achieved performance comparable to leading AI systems, such as OpenAI's ChatGPT, but at a fraction of the development cost.

The launch of DeepSeek-R1 sent shock waves through the technology industry, causing a notable decline in the stock prices of major tech companies, including Microsoft, Meta and Nvidia, on Monday.

Analysts attributed the tech rally to bargain hunting and confidence in AI's long-term profitability, despite DeepSeek's recent disruption.

"Today's recovery is to be anticipated given the magnitude of yesterday's selloff," said Cody Acree, chip industry analyst at Benchmark Company. "Everything was taken down en masse without much foresight into each company's exposure."

While there were some doubts over DeepSeek's cost claims, OpenAI CEO Sam Altman called the company an "impressive model."

"We will obviously deliver much better models and also it's legit invigorating to have a new competitor!" Altman said in a social media post.

Schmidt stressed the importance of open-source development as a countermeasure to DeepSeek's advancements. He called on the United States to foster collaboration, develop competitive AI solutions, and address the shifting dynamics of global AI competition.

(Cover: VCG)