Trump's ‘America First' Agenda Meets China's AI Advancement - CNN One Thing - Podcast on CNN Audio

CNN

29-01-2025

President Donald Trump
00:00:04
thank you very much. And it's an honor to be here today. We have a first full day as president. We're back.
David Rind
00:00:13
Last Tuesday, President Donald Trump gathered a trio of tech leaders for a big announcement at the White House.
President Donald Trump
00:00:20
Together, these world leading technology giants are announcing the formation of Stargate. So put that name down in your books, because I think you're going to hear a lot about it.
David Rind
00:00:32
SoftBank CEO Masayoshi Son OpenAI CEO Sam Altman and Oracle Chairman Larry Ellison say they're going to invest up to $500 billion into this new company, Stargate, in the coming years to finance the building of massive data centers to help power artificial intelligence projects.
Larry Ellison
00:00:52
The first of them are under construction in Texas, each building a half 1,000,000ft².
David Rind
00:00:57
The fact that this an AI infrastructure announcement was among the very first things Trump rolled out on his first full day back in office, just underscored how badly his administration and advocates like Sam Altman want America to win the AI arms race against China.
Sam Altman
00:01:15
But I do want to say I'm thrilled we get to do this in the United States of America. I think this will be the most important project of this era.
David Rind
00:01:22
Well, less than a week later.
John Berman
00:01:25
Alright, we do have breaking news. Stock markets open just a few minutes ago. And it's not pretty...
David Rind
00:01:31
Known Chinese air company was wreaking havoc on Wall.
Dana Bash
00:01:36
The Chinese startup is called Deep Sick and it says it spent less than $6 million to create its new AI model, challenging the notion that it takes hundreds of millions of dollars and sophisticated chips to develop AI products. Now, the Nasdaq.
David Rind
00:01:52
Now some experts are asking, did deep seek just upend key assumptions about that arms race? My guest is CNN business reporter Matt Egan. We're going to explain how deep sea could reset Trump's America First agenda and his relationship with Big Tech's biggest titans. From CNN. This is one thing. I'm David Wright. So, Matt, what was this air announcement out of China that spooked the stock market so badly on Monday?
Matt Egan
00:02:29
Well, it's really incredible. We had this tiny startup stun investors on Wall Street and really caused them to rethink some fundamental questions about AI. So we're talking about deep sea. This is a little known Chinese startup.
David Rind
00:02:44
Yeah, I'd never heard of it before Monday.
Matt Egan
00:02:46
I don't think many people had either. And it came out on January 20th with an announcement that its latest AI model can basically go toe to toe with the best AI models out there. And this was stunning by itself, but also the fact that they said they were able to build this AI model at a fraction of the cost of what other A.I. technologies are said to cost and with far fewer leading edge computer chips. All of that was just startling to investors and I would imagine officials in Washington.
David Rind
00:03:26
And this is like GPT, right? It's basically a chat bot. You can ask questions. It searches the model that it has and it spits back an answer. Right?
Matt Egan
00:03:35
Exactly. That's right. And the thinking had been that only the United States had that kind of technology. Right? The chat GPT, Google's Gemini, Anthropic's Claude. And all of a sudden we have this new player, deep sea that can do that. And again, it can do that. It said at a fraction of the cost. And so we saw a really dramatic impact in the market. There was basically a meltdown in the A.I. world.
Boris Sanchez
00:04:03
Breaking news to CNN. US tech stocks took a dive today...
Matt Egan
00:04:06
And computer chip makers, especially in video, which had been going straight up, crashed.
Boris Sanchez
00:04:12
A chip maker and video a giant is also plummeting. You see it there, down a whopping 17%.
Matt Egan
00:04:20
NVIDIA lost more than half $1 trillion in market value in one day. Is the biggest ever wipe out in a single day that we've ever seen. Other computer chip stocks also fell sharply. Even energy and power companies got caught up in this sell off. We saw companies like Constellation Energy, which is planning to bring back online nuclear plants. Even Three Mile Island is supposed to be brought back to help power these data centers. That's why we saw all those companies lose value really sharply. Well, tell.
David Rind
00:04:56
Me about these chips then, because I thought the U.S. was trying to restrict the export of these very specialized chips that were developed in the U.S. to other countries like China so they don't get a leg up. So what happened?
Matt Egan
00:05:09
That's exactly right. In theory, Deep Seek shouldn't really be possible because the U.S. has these very tough export restrictions that are supposed to be preventing the flow of leading edge computer chips and AI software from getting to China with this specific goal of slowing their progress on. So the fact that Deep Seek has done it has raised some questions. And there's a few schools of thought here.
Erica Hill
00:05:39
Just a week before Donald Trump takes office, the Biden administration unveiling a fresh round of restrictions on the export of U.S. developed computer chips that power artificial intelligence.
Matt Egan
00:05:49
Some argue that the export restrictions have backfired because they essentially forced China to come up with ways around the restrictions to innovate around them and to come up with new efficiencies to build their AI models.
Erica Hill
00:06:07
These new restrictions are quite broad. They essentially divide the world into three tiers. The first tier is includes U.S. allies like South Korea, Japan, Australia, Taiwan. They will face no new restrictions. The second tier includes China and Russia, which are already blocked from buying advanced AI chips. They will now face restrictions on buying closed source A.I. models.
Matt Egan
00:06:29
One researcher said We accidentally upped China's technical game. So that's one school of thought. But there's also some doubt about some of the claims that the U.S. is making.
David Rind
00:06:43
Yeah, I was going to say, what kind of proof is this company putting forward that they were able to do this without these chips and at such a cheap cost?
Matt Egan
00:06:51
We don't know. We don't know yet whether or not those claims are accurate. And that is part of the issue here. They're claiming that they built this on less than $6 million to train their model. Some experts that I talked to that are very skeptical about that figure. And there's also some skepticism about whether or not Deep Seek had access to the leading edge in Vedere computer chip.
David Rind
00:07:23
There's some that could have gotten in some other way.
Matt Egan
00:07:26
'Right. That perhaps they stockpiled some chips before certain restrictions went into effect or that they were buying a lot of those chips on what has been described to me as a very active black market or perhaps a combination of the two. I talked to Art Hogan. He's a veteran market strategist, and he said, look, China is claiming that they came up with a silver bullet here, but it could be like the guy in high school who says he has a girlfriend, but she's just at a different school. So there's some skepticism here. And that's important because if what happened is that China was able to get around the restrictions by stockpiling or through the black market or both, then that suggests that perhaps the export controls that were put in place by Trump 1.0 by President Biden and are in fact right now, that perhaps they should be strengthened. And there's some analysts that I talked to who say, look, it's been a game of Whac-A-Mole and there are loopholes. There's not enough enforcement and that President Trump is likely to double down here.
David Rind
00:08:32
I was going to say, it seems like, you know, either way, this company had to get creative and had to find a way to kind of work around whatever was in place. So what does the Trump administration do from here? Because they've been, you know, touting these relationships with leaders in the field to build more data centers because they want to win this arms race. Right. So what has been Trump's reaction to all of this?
Matt Egan
00:08:58
Well, President Trump said it's been a wake up call and he said that it really puts the onus on the tech industry, on Silicon Valley to do more.
President Donald Trump
00:09:07
I really think if it's if it's fact and if it's true and nobody really knows if it is, but I view that as a positive because you'll be doing that too. So you won't be spending as much and you'll get the same result, hopefully.
Matt Egan
00:09:20
And given the fact that he has surrounded himself with some hawks on China, such as Secretary of State Marco Rubio, it's easy to see how deep seek and this moment that we've seen in this reaction in the market could spur the Trump administration to take a tougher look at these export controls and do more to try to restrict the flow of leading edge technology to China.
David Rind
00:09:46
Is there more to be done?
Matt Egan
00:09:48
I'm told that there is, especially on enforcement, that to some extent this has been left up to companies, to police themselves. And I could see the Trump administration taking a tough look at what's been done on enforcement, what else can be done here. And look, David, that the stakes are massive for I mean, is this technology that has potential to reshape society. And there is this arms race and we knew there was an arms race. Yeah, but deep sick suggest that the arms race is closer than we had previously realized.
David Rind
00:10:35
The fact that this is a Chinese company is interesting, right? Because I, I downloaded the app and I used it and I was asking it some questions. I asked it about Taiwan and I wanted to see what it would say. And it was giving me at first a bunch of like, I can't answer that right now. I don't have an answer to that. And eventually it said something to the tune of, you know, China recognizes the one China policy regarding Taiwan. I have to follow that because it is linked to the Chinese government. Right. So like, how much of a concern is that to American officials when you see a company like this, take these leaps and steps and it be linked to Chinese government?
Matt Egan
00:11:16
There's obviously a lot of concerns about censorship when it comes to technology. But when you add in the deep sea China element, those concerns have got to go on steroids. Because to your point, China can and is said to already be censoring some of the results here. It's easy to see how that continues. And that is a very important thing when you consider that deep sea, this newest model's only been around for a little over a week, and yet it's already topping the charts on the Apple App Store. And so a lot of people are going to be using this and they're going to be asking questions about what's going on in the world. And it's not totally clear that they're going to be getting a real factual, objective answer.
David Rind
00:12:05
From these countries that to ticktock. And the conversations are on there. And it seems like a much more blatant example of what the hawks talk about exactly are.
Matt Egan
00:12:14
Tik Tok has these national security privacy concerns, according to many people in the government, because of its links to China. And again, those concerns are magnified and much clearer when it comes to deep sea and whatever comes after deep sea.
David Rind
00:12:35
'Well, you know, so more broadly, when we talk about Silicon Valley and the whole concept of just how much investment is going to be needed to fuel the so-called A.I. revolution and whether it will actually revolutionize anything is kind of an open question at this point. I think it's fair to look at it with some skepticism. But like Mark Zuckerberg said that Metta would spend $65 billion on AI this year. Sam Altman from OpenAI. I predicted trillions trillions would be needed to fuel data centers. But if the numbers that DB Sic is putting out, you know, the 6 million or so to develop the model up to this point turns out to be true, wouldn't that basically just blow up this whole idea of we need to scale, we need to value this whole kind of business model that is undergirding Silicon Valley.
Matt Egan
00:13:24
It would force a rethink of just how much money it's going to cost to build this AI boom. But it is important to make a distinction between training in a AI model and running it so deep. Sik has talked about how it didn't cost them very much to build this model, to train it, but that's different from running it. And if you have millions of people using deep seek, that is going to take a significant amount of computing power to answer all of those queries from the people around the world. And that is also going to consume a significant amount of money. There's just a lot of uncertainty here, and I think that's what happens sometimes when you have a game changing technology. There's a wide range of possibilities and there are moments like this deep sick moment that force a reevaluation of preconceived notions.
David Rind
00:14:23
And we've seen Trump really stressing the need for less regulation on this industry to kind of prop up that growth here in the US. But there are questions as to the byproduct of that, right?
Matt Egan
00:14:35
Listen, there's always a balance between having enough safeguards in place to innovate in a responsible way and not having so many safeguards that it stifles innovation and the building of the next great technology. I think the stakes here are even bigger because artificial intelligence is getting so smart that it has raised significant safety concerns. And I think some of those safety concerns have actually been pushed out of the spotlight recently by these advancements in China. But they do still exist. And so it's going to be really important to try to get that balance right between supporting the investment and the innovation and keeping it safe and also getting that balance right over time. When you have these swings in power in Washington, it's it's not going to be easy.
David Rind
00:15:31
Yeah, there's there's not a lot of stability for an industry. It is constantly in flux. And that makes things really difficult going forward. Well, Matt, thank you for introducing me to Deep Sick. I feel like I at least have some understanding of it now.
Matt Egan
00:15:43
Thank you. Of course. Thanks for having me. I appreciate it.
David Rind
00:16:00
One thing is a production of CNN Audio. This episode was produced by Paola Ortiz and me, David Rind. Our senior producers are Felicia Patinkin and Faiz Jamil. Matt Dempsey is our production manager. Dan Dzula is our technical director and Steve Lickteig is the executive producer of CNN Audio. We get support from Haley Thomas, Alex Manasseri, Robert Mathers, John Dianora, Leni Steinhart, Jamus Andrest, Nichole Pesaru and Lisa Namerow. Special thanks to Wendy Brundage. If you're new here, make sure you follow the show so you don't miss an episode we post on Wednesdays and Sundays. And if you like what you're hearing, leave a rating and a review wherever you listen. It helps other people discover the show and hate the more the merrier. Talk you on Sunday.