Powerful artificial intelligence software from Chinese startup DeepSeek indicates that its engineers built a competitive model despite U.S. attempts to curtail China’s tech development, raising questions about the effectiveness of Washington’s trade curbs.
The company’s recently released R1 model, which it claims to have developed at a fraction of the cost borne by rival AI companies, sent tech stocks into a tailspin Monday as investors questioned the need to spend billions on advanced hardware. It’s also sparked a debate in Washington about the best strategy to prevent China from developing cutting-edge AI, which U.S. policymakers see as a national security risk.
The U.S. imposed sweeping controls on the sale of the most advanced Nvidia chips to China in October 2022, and has ratcheted up the measures each year since. But Nvidia has responded by designing new semiconductors for the Chinese market — including those DeepSeek likely used to build R1.
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