Unexpected success of DeepSeek scrambles U.S.-China technology war

US President Donald Trump could tighten the screws through additional restrictions on China's access to semiconductors, says a former official

- Liza Lin & Josh Chin

The unexpected success of Chinese AI startup DeepSeek has revealed cracks in U.S. efforts to contain China's technology ambitions, challenging both Washington and Silicon Valley to rethink how best to preserve American supremacy.

The Biden administration took what it called a "small yard, high fence" approach to the U.S.'s tech rivalry with China: It erected strict barriers to prevent U.S. companies from selling advanced chips and other critical know-how that Beijing could exploit to strengthen its military and surveillance capabilities, but otherwise allowed business to proceed as usual.

Backers of the policy thought it would keep the U.S. ahead in technologies such as artificial intelligence.

But now DeepSeek has blasted through the barriers, releasing a low-cost AI model that rivals American achievements. Its success is fueling debate over whether the U.S. needs a new approach, with DeepSeek serving as a Rorschach test for people with differing beliefs about the best way forward.

Backers of a hard line against China say that DeepSeek was able to use deficiencies in the Biden administration's rules to accumulate chips it shouldn't be able to access. The logical way forward, some argue, is for Washington to double down with even tougher rules to ensure Chinese companies can't access advanced U.S. technology in the future.

Others say DeepSeek's progress only encourages China to work harder to innovate while depriving American companies of revenue. It is a position China itself is now proclaiming. "Trying to curb technological development by restricting hardware is like trying to dam a large river while overlooking the countless streams that feed it," the Communist Party-run Global Times wrote in a commentary on Monday.