China, previously known for producing low-quality knock-offs, has emerged as an innovator in various high-tech fields. Recent breakthroughs in iron-making, stealth fighter jets, satellite communication,

The start-up had become a key player in the “Chinese Large-Model Technology Avengers Team” that would counter US AI dominance, said another. China’s delight, however, spelled pain for several giant US technology companies as investors questioned whether DeepSeek’s breakthrough undermined the case for their colossal spending on AI infrastructure.

The U.S. tried to slow China’s advances, but the startup showed how hard that is.