This week’s announcement from Chinese AI startup DeepSeek dominated the AI policy discussion, particularly in the US. News that DeepSeek’s model can outperform existing U.S. AI applications at a fraction of the cost set off a wide range of reactions and concern from American policymakers, in addition to unease among investors that sparked a significant tech stock selloff, including, perhaps most notably, of Nvidia. Trump stated that he views the development as a positive, as it demonstrates the potential for innovation at a lower cost, however he also emphasized that DeepSeek should serve as a wakeup call for the industry “to be laser-focused on competing to win.” White House AI and Crypto Czar David Sacks added that the development reinforces Trump’s decision to revoke Biden’s AI Executive Order, remarking that the U.S. must not be complacent. Key leaders in the Senate, including Majority Leader John Thune (R-SD), Minority Leader Chuck Schumer (D-NY), and Commerce Committee Chair Ted Cruz (R-TX) all further emphasized the need for America to lead the way on AI in light of the DeepSeek announcement.
At the same time, the announcement has set off debates about the need and effectiveness of export controls, the utility of open-source systems, whether or not China is stealing the intellectual property of U.S. companies, and similar potential manipulation concerns as raised about the TikTok algorithm. Senators Mike Rounds (R-SD) and Shelly Moore Capito (R-WA) and OpenAI CEO Sam Altman, for example, all expressed concern this week that DeepSeek may have inappropriately distilled U.S. technology. In an interview with Fox News, Sacks gave credence to the concerns, stating that there is evidence that DeepSeek learned from OpenAI’s models.
Additionally, Chairman John Moolenaar (R-MI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on China wrote a letter to National Security Advisor Mike Waltz urging him to review the potential national security benefits of placing export controls on semiconductor chips critical to DeepSeek’s AI infrastructure. As part of the review, the lawmakers also asked the Administration to strengthen controls on shipments through third countries that pose a high risk of diversion to China. Bloomberg had previously reported that the Trump Administration is considering tightening export controls on sales of Nvidia’s H20 chips to China, which had been designed to comply with existing Biden-era regulations.