In terms of timing, it doesn’t get much better than this. On 20 January 2025, with the world focused on Donald Trump’s inauguration, China’s DeepSeek quietly launched its low-cost, open-source, high-performance large language model, called R1. The capabilities of DeepSeek are reported to rival or even surpass OpenAI’s ChatGPT-4, and at a fraction of the cost (DeepSeek was reputedly built for US$6 million, however other estimates put it as high as US$1 billion). The impact was immediate: America’s Nasdaq plunged 3.1 per cent, while the S&P 500 fell 1.5 per cent. DeepSeek’s emergence marks the latest flashpoint in US-China AI rivalry. Since 2017, technological competition between the two superpowers has intensified through tariffs, export controls, and market restrictions. The rapid development of Chinese artificial intelligence has reignited debates over US chip export controls. Critics argue these restrictions accelerate China’s domestic innovation, as evidenced by DeepSeek’s development. China has shown it can overcome barriers like limited access to top-tier chips by boosting efficiency or compensating for lower-quality hardware with quantity. This raises questions about the effectiveness and unintended consequences of US chip policies.

Full commentary : As both the United States and China vie for artificial intelligence tech supremacy, the global impact could be catastrophic.