Investor confidence has waned in 2025, driven by President Trump's persistent threats of tariffs and growing uncertainty surrounding artificial intelligence. Trump's plans for new steel and aluminum tariffs, coupled with his previous tariff announcements, have sent stock markets tumbling. Additionally, DeepSeek's claims of cost-efficient AI development have challenged Big Tech's trillion-dollar investments in the field, leading to market volatility.
The excitement over artificial intelligence and U.S. President Donald Trump's perceived friendliness to the stock market buoyed up investor sentiment as recently as December. In 2025, it seems those animal spirits have somewhat evaporated.
Any time Trump brings up tariffs, investors have been reacting badly . His threat of reciprocal tariffs on Friday — that is, imposing on other countries the same degree of duties that they place on the U.S. — sent stocks tumbling. New tariffs on steel and aluminum, which Trump says he will announce on Monday, are likely to sink stocks further.
Likewise, AI, the engine that drove stocks higher in 2024, seems to present investors with more uncertainty than enthusiasm this year. DeepSeek's claim that its training required just a fraction of the billions of dollars that U.S. AI models suck up have thrown Big Tech's investments — which will amount to more than $300 billion in 2025 — as well as their stock valuation into question.
at a $260 billion pre-money valuation, sources told CNBC's David Faber. The cost efficiency of DeepSeek doesn't seem to deter Big Tech:and data centers. Demis Hassabis, the CEO of Google DeepMind, said on Friday that while DeepSeek is"the best work" he's seen from China,", out Wednesday and Thursday respectively, will be especially important to investors.
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