DeepSeek's 'Sputnik moment' reveals holes in US chip curbs

US export controls on high-tech chips may have inadvertently fueled the success of start-up DeepSeek's artificial intelligence (AI) chatbot, sparking fears in Washington there could be little it can do to stop China in the push for global dominance in AI.

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The firm, based in Hangzhou, has stunned investors and industry insiders with its R1 programme, which can match its American competitors seemingly at a fraction of the cost.

That is despite a strict US regime prohibiting Chinese firms from accessing the kinds of advanced chips needed to power the massive learning models used to develop AI.

DeepSeek founder Liang Wenfeng has admitted the "embargo on high-end chips" has proved a major hurdle in its work.

But while the curbs have long aimed to ensure US tech dominance, analysts suggest they may have spurred the firm to develop clever ways to overcome them.

The company has said it used the less-advanced H800 chips permitted for export to China until late 2023 to power its large learning model.

"The constraints on China's access to chips forced the DeepSeek team to train more efficient models that could still be competitive without huge compute training costs," George Washington University Assistant Professor Jeffrey Ding told AFP.

The success of DeepSeek, he said, showed "US export controls are ineffective at preventing other countries from developing frontier models".

"History tells us it is impossible to bottle up a general-purpose technology like artificial intelligence."

DeepSeek is far from the first Chinese firm forced to innovate in this way: Tech giant Huawei has roared back into profit in recent years after reorienting its business to address US sanctions.