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US Blows AI Lead in Race With China [Video]

OpenAI rival DeepSeek has sent a sobering message to Washington and Silicon Valley, showcasing China’s erosion of the U.S.’s lead in a critical tech battleground.

Such has been its impact that one prominent venture capitalist has described it as “AI’s Sputnik moment” and a scientist told Newsweek that “China has basically caught up to the U.S.” in the field of generative AI.

Newsweek contacted DeepSeek, OpenAI and the U.S. Department of Commerce’s Bureau of Industry and Security for comment via email.

Why It Matters

DeepSeek, a little-known company in Hangzhou, China, said its DeepSeek-R1 AI model, which burst onto the scene last week, was trained in two months for less than $6 million and using fewer chips. The app rode the buzz, becoming the most downloaded free app not only in China but also on the Apple Store in the U.S.

The U.S. previously tightened restrictions on the exportof advanced semiconductors used for cutting-edge …

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