China’s DeepSeek AI Coup: Three Takeaways for U.S. Policymakers

By Paul Steidler: On Monday, January 27, as the Nasdaq Composite was getting routed on news that a small Chinese startup had launched a similar app to ChatGPT at a fraction of the cost, President Trump added a dose of much-needed reality to how policymakers and businesses should see AI.

Trump said DeepSeek’s achievement is a “positive” and that it should be “a wakeup call for our industries that we need to be laser-focused on competing to win.” Renowned AI venture capitalist Marc Andreesen was similarly blunt on X, “Deepseek R1 is AI’s Sputnik moment.”

So how exactly is China scoring a major technological coup good news?

First, it is a reminder that China has committed to being the world’s leading provider of AI by 2030 and that it will use the sizable tools and capital of its government, as well as a thriving entrepreneurial sector to get there. The U.S. tech sector will be integral in responding to this competitive threat. Indeed, the tech sector is a key national asset and should be viewed and treated as such.

Second, it validates President Trump’s approach to end needless AI regulations. It also further refutes the false narrative pushed by former Federal Trade Commission Chair Lina Khan and senior White House aides that only a handful of technology companies could drive AI, and therefore those companies need to be tightly regulated.

Third, it illustrates that the U.S. must demand changes from the European Union, which has stymied its domestic tech sector for 30 years due to its aggressive regulatory approach while imposing unacceptable costs and risks on American tech leaders. It is in Europe’s self-interest to recognize the U.S. is the only viable counterweight to China on AI.

AI holds the promise to radically improve all aspects of American life by, for example, significantly increasing agricultural production, accelerating cures for diseases, and identifying cleaner and more efficient manufacturing processes. Whoever wins the AI race and does so by cooperating and working with other nations will be the world’s economic and military leader.

Now is the time for U.S. policymakers to re-focus on those basics.