A little-known Chinese AI startup, DeepSeek, sent shockwaves through the tech world by releasing an OpenAI-like assistant that quickly climbed to the No. 1 spot on Apple’s App Store. The model, DeepSeek R1, reportedly rivals and even surpasses OpenAI’s cutting-edge AI while operating at a fraction of the cost. The revelation caused U.S. tech stocks to tumble, raising urgent policy questions in Washington.
Despite bipartisan efforts to curb China’s AI progress through export controls and tech restrictions, DeepSeek’s achievement suggests that these policies may not be working as intended. The development has sparked two contrasting reactions in the U.S.: Some industry leaders celebrate the possibility of cheaper AI models, while others—like Trump’s AI czar David Sacks—warn this is a “Sputnik moment” demanding more aggressive U.S. AI investment and stricter restrictions on China.