But the story of DeepSeek also reveals just how much Chinese technological development continues to depend on the United States. DeepSeek used chips from the U.S. giant Nvidia to create its model, and, as it turns out, may have also tapped American data to train it. Washington can capitalize on that advantage to choke off Chinese tech firms.

Robust gains by Chinese tech stocks have added billions of dollars in their market capitalization, driven by the sudden rise to fame by homegrown AI app DeepSeek.

Entrepreneur Marc Andreessen, known for co-writing Mosaic, one of the world’s first web browsers, wrote Sunday on X that “DeepSeek R1 is AI’s Sputnik moment,” likening it to the space race between the U.S. and the Soviet Union and the event that forced the U.S. to realize that its technological abilities were not unassailable.