"DeepSeek's AI Shakes U.S. Tech & Crypto: Trump's Praise, IP Theft Claims, $1T Wipeout"

Cathie Wood, the renowned tech investor and CEO of ARK Invest, has expressed her views on the potential impact of DeepSeek's AI on the U.S. tech industry and Donald Trump's stance on the competition. DeepSeek, a Chinese AI company, has recently launched an AI model that has disrupted the tech industry, leading to concerns about overvaluation and market uncertainty.

Crypto mining stocks have been particularly hard hit by DeepSeek's AI, with companies like Riot, MARA, and Coinbase experiencing significant stock declines. The low-cost AI services offered by DeepSeek have raised concerns about the sustainability of AI investments, leading investors to rethink their strategies in both tech and crypto markets.

DeepSeek's AI model has also had an impact on AI crypto tokens, with the total market capitalization for these tokens dropping by 5.11% in the last 24 hours. Projects like Venice Token (VVV) and Virtuals Protocol (VIRTUALS) have suffered significant losses, highlighting the challenges faced by both AI and crypto sectors.

In a surprising turn of events, U.S. officials have classified DeepSeek's AI as a potential case of intellectual property theft, just a day after President Trump praised it as a "positive" development. White House AI and crypto czar David Sacks has claimed that there is "substantial evidence" that DeepSeek "distilled" knowledge from OpenAI's models, a process he likened to intellectual property theft.

The launch of DeepSeek's R1 model triggered a massive sell-off in tech stocks, wiping over $1 trillion from the Nasdaq Composite Index. NVIDIA suffered the worst single-day loss in U.S. history, plunging by $600 billion, while Alphabet and Microsoft also took major hits. The crypto market also reacted to the development, with Bitcoin briefly dipping below $100,000 and total liquidations soaring by more than 850% on Jan. 27.

As DeepSeek continues to rise, there is a genuine fear of competition between traditional and decentralized AI networks. This has significantly contributed to the recent market downturn, influencing sentiment across crypto and stock markets. Projects like Artificial Superintelligence Alliance (FET) have struggled recently, with prices dipping 20% in the last seven days alone.

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