This Chinese AI startup is taking on Silicon Valley giants

THE DAY AFTER Christmas, a small Chinese start-up called DeepSeek unveiled a new AI system that could match the capabilities of cutting-edge chatbots from companies like OpenAI and Google.

- CADE METZ & MEAGHAN TOBIN

That alone would have been a milestone. But the team behind the system, called DeepSeek-V3, described an even bigger step. In a research paper explaining how they built the technology, DeepSeek's engineers said they used only a fraction of the highly specialized computer chips that leading A.I. companies relied on to train their systems.

These chips are at the center of a tense technological competition between the United States and China. As the US government works to maintain the country's lead in the global AI race, it is trying to limit the number of powerful chips, like those made by Silicon Valley firm Nvidia, that can be sold to China and other rivals.

But the performance of the DeepSeek model raises questions about the unintended consequences of the American government's trade restrictions. The controls have forced researchers in China to get creative with a wide range of tools that are freely available on the internet.