"Hopefully, the release of DeepSeek AI from a Chinese company should be a wake up call for our industries that we need to be laser-focused on competing to win," Trump told a Republican congressional retreat in Miami.

But Trump said the shock could also be "positive" for Silicon Valley by forcing it to innovate more cheaply.

"I would say that could be a positive," Trump said. "So instead of spending billions and billions, you'll spend less, and you'll come up with hopefully the same solution."

Trump's comments came after US chip-maker Nvidia, whose semiconductors power the AI industry, led a massacre in tech stocks, losing nearly $600 billion of its market value.

The chatbot developed by DeepSeek, a startup based in the eastern Chinese city of Hangzhou, has apparently shown the ability to match the capacity of US AI pace-setters for a fraction of the investments made by American companies.

Just last week following his inauguration for a second term, Trump announced a $500 billion venture to build infrastructure for AI in the United States led by Japanese giant SoftBank and ChatGPT-maker OpenAI.