When ChatGPT stormed the world of artificial intelligence (AI), an inevitable question followed: did it spell trouble for China, America’s biggest tech rival?

Two years on, a new AI model from China has flipped that question: can the US stop Chinese innovation?

For a while, Beijing seemed to fumble with its answer to ChatGPT, which is not available in China.

Unimpressed users mocked Ernie, the chatbot by search engine giant Baidu. Then came versions by tech firms Tencent and ByteDance, which were dismissed as followers of ChatGPT – but not as good.

Washington was confident that it was ahead and wanted to keep it that way. So the Biden administration ramped up restrictions banning the export of advanced chips and technology to China.

That’s why DeepSeek’s launch has astonished Silicon Valley and the world. The firm says its powerful model is far cheaper than the billions US firms have spent on AI.

So how did a little-known company – whose founder is being hailed on Chinese social media as an “AI hero” – pull this off?