US tech firms are scrambling to figure out what to make of <a href="https://www.thenationalnews.com/business/2025/01/28/can-deepseek-really-replace-chatgpt-with-its-cheaper-ai-model/" target="_blank" title="https://www.thenationalnews.com/business/2025/01/28/can-deepseek-really-replace-chatgpt-with-its-cheaper-ai-model/">DeepSeek</a>, the Chinese company and its AI platform that promises to do more and cost less. If <a href="https://www.thenationalnews.com/video/ols0ISFO/" target="_blank" rel="" title="https://www.thenationalnews.com/video/ols0ISFO/">DeepSeek's</a> technical claims are true, it could put a severe dent in what was once seen as an insatiable desire and technical necessity to acquire graphics processing units (GPUs). Chip designer <a href="https://www.thenationalnews.com/future/technology/2025/01/27/why-nvidia-stock-dip-after-deepseek-launch-is-a-healthy-market-correction/" target="_blank" title="https://www.thenationalnews.com/future/technology/2025/01/27/why-nvidia-stock-dip-after-deepseek-launch-is-a-healthy-market-correction/">Nvidia's stock price took a dive</a> on Monday on the news of DeepSeek. The need for GPUs was a critical part of the prosperity experienced by companies such as Nvidia. In turn, that prosperity trickled down to energy companies powering the GPUs. This economic ecosystem had many winners, but now appears vulnerable to DeepSeek's apparently leaner AI platform, which doesn't require as many resources. <a href="https://www.thenationalnews.com/future/technology/2025/01/27/deepseek-ai-r1-stock/" target="_blank" rel="" title="https://www.thenationalnews.com/future/technology/2025/01/27/deepseek-ai-r1-stock/">DeepSeek's</a> app took the top spot on Apple's App Store on Monday, days after the outgoing Biden administration announced new export rules on chips designed to <a href="https://www.thenationalnews.com/future/technology/2025/01/13/nvidia-says-new-biden-ai-rules-undermine-us-interests/" target="_blank" rel="" title="https://www.thenationalnews.com/future/technology/2025/01/13/nvidia-says-new-biden-ai-rules-undermine-us-interests/">protect the US lead on artificial intelligence</a>. Those regulations were criticised by Nvidia, which said the rules would “undermine US leadership” in the AI and GPU space. One export rule stated that <a href="https://www.thenationalnews.com/future/technology/2025/01/15/us-commerce-official-defends-bidens-ai-diffusion-rules-after-nvidia-criticisms/" target="_blank" title="https://www.thenationalnews.com/future/technology/2025/01/15/us-commerce-official-defends-bidens-ai-diffusion-rules-after-nvidia-criticisms/">18 countries would be exempt</a> from any red tape when it came to acquiring GPUs, leaving other nations looking in when trying to build out AI infrastructure for largely non-frontier AI use cases like healthcare and science research. Yet the claims made by DeepSeek that their AI platform requires less energy and therefore less powerful GPUs appear to have rendered the new US export controls moot. The export controls had been in the works for several administrations, including both Obama terms and Mr Trump's first term, as the <a href="https://www.thenationalnews.com/future/technology/2025/01/28/china-us-ai-race-deepseek/" target="_blank" rel="" title="https://www.thenationalnews.com/future/technology/2025/01/28/china-us-ai-race-deepseek/">US-China rivalry</a> hit new heights. Those rules, some have argued, prompted China to try to find workarounds such as those promoted by DeepSeek. “DeepSeek’s apparent market success shows how fragile anyone’s lead in Generative AI is – after all, as an insider at Google pointed out in 2023, there is no ‘moat',” said Andrew Rogoyski, director of innovation and partnerships at the Surrey Institute for People-Centred AI, University of Surrey. In the case of DeepSeek, the moat that the US tried to build with export controls might not even be needed. “It also begs the question of whether massive investments like the <a href="https://www.thenationalnews.com/future/technology/2025/01/21/stargate-openai-oracle-and-softbank-to-launch-new-ai-venture/" target="_blank" rel="" title="https://www.thenationalnews.com/future/technology/2025/01/21/stargate-openai-oracle-and-softbank-to-launch-new-ai-venture/">$500 billion Stargate project</a> are going to be necessary if clever developments if GenAI can significantly reduce the need for huge compute resources. Is this another ‘Sputnik moment’, where the US realises it might not be as dominant in a technology as it thought?” Prof Rogoyski said. He also pointed out that for several years, creating innovations in the AI space required access to incredible amounts of computing infrastructure, more colloquially known as "compute power". Those with access to those resources were the usual Big Tech suspects such as OpenAI, Alphabet and Anthropic. Neil Chilson, head of AI policy at The Abundance Institute and former FTC chief technologist during President Trump's first term, said that the development of DeepSeek should cause politicians to rethink their approaches to technology policy. “Regulators and legislators at the federal, state, and even local levels are developing frameworks that would cripple US open source development,” he said. “It would be deeply ironic if a failure to protect Americans’ right to compute leaves China as the international standard for open artificial intelligence models.” Meanwhile, in the US Congress, Democratic Senate Minority Leader Charles Schumer echoed the sentiments by some that DeepSeek's rapid rise was akin to a "Sputnik moment", which should prompt the US to try to maintain a competitive advantage in AI. “This announcement is precisely why I made AI a top priority in the last Congress and will continue to do so,” he said on the Senate floor. “Our competitors are going to use every single opportunity to overtake the US lead on the technologies of the future, particularly AI, and if Congress doesn't lead the way, we're going to fall behind,” he added, making the push for more bipartisan efforts on AI. Over on the Republican side, Rep. John Moolenaar was more direct in his assessment of the DeepSeek platform. "DeepSeek openly erases CCP's history of atrocities and oppression," he posted to X on behalf of the congressional select committee on Chinese policy. "The US cannot allow CCP models such as DeepSeek to risk our national security and leverage our technology to advance their AI ambitions." Meanwhile, experts, analysts and AI rivals are looking into DeepSeek's claims regarding its efficiency, which could blow a hole in the existing AI ecosystem. “While their work is genuinely impressive, we should avoid both alarmist reactions and complacency,” said Dean Ball, a research fellow with the Mercatus Centre, a research institute at George Mason University. “It should be a reminder that competition will be fierce, progress will be rapid, and the AI ecosystem will feel turbulent for the foreseeable future,” he added.