A Chinese AI startup, DeepSeek, has released an open-sourced problem-solving model, R1, that’s wowed Silicon Valley. The model uses far less computing power and far fewer chips – therefore far less money, roughly 3-5% of the development costs for ChatGPT – to achieve the same or better results as its US counterparts.

The model is open-source, which has allowed engineers outside of China to audit its parent company’s claims. Venture capitalist Marc Andreessen, who is advising the Trump White House, called R1 “AI’s Sputnik moment”, a bona fide breakthrough. The global AI community widely considered the US the leader in AI, but R1 has called that dominance into question.