The Chinese start-up’s low-cost AI models have shaken the tech sector and Washington, with US Congress weighing actions in a ‘Sputnik moment’
As the global tech industry reels from the emergence of Chinese start-up DeepSeek, the US Congress is reacting quickly with proposals to separate US AI development from China and strengthen its competitive edge.
One of the most expansive efforts is a bill by Senator Josh Hawley that seeks to ban imports of AI technology and intellectual property developed or produced in China, as well as exports of US AI tech to China.
Introduced this week, the bill would also prohibit US companies from investing in any Chinese entity that conducts AI research or development or is involved in the production of software or hardware that incorporates AI-related research and development.
Additionally, the Decoupling America’s Artificial Intelligence Capabilities from China Act would prohibit US companies and universities from conducting AI research in China or in cooperation with any Chinese company and university.
“Every dollar and gig of data that flows into Chinese AI are dollars and data that will ultimately be used against the United States,” Hawley, a Missouri Republican, said.
To become law, the bill would have to pass the full Senate and House of Representatives before being sent to the White House for the president’s signature. It currently has no confirmed cosponsors.
Paul Triolo, a partner at Washington-based consultancy DGA-Albright Stonebridge Group, said he expects “major opposition” to Hawley’s bill from industry and other lawmakers due to its scope.
“The proposal is not realistic and reflects a series of misconceptions about the impact of US companies and researchers on the AI situation in China,” he said.
The US and China currently have limited joint research or codevelopment on AI. According to Denis Simon, a non-resident fellow at the Washington-based Quincy Institute, while there have been bilateral talks on AI safety, collaboration on AI research and development is “generally not happening”.
“In terms of scientific principles, I think US universities have an interest, but they have a great trepidation in doing anything that might even appear to undermine US national security interest,” he said.
Simon added that AI collaboration in sectors like pharmaceuticals could yield “substantial” benefits for both sides.
Washington’s concern over DeepSeek is bipartisan. On Thursday, the leaders of the House Select Committee on China released a letter urging National Security Adviser Mike Waltz to consider restricting the export of AI chips made by Silicon Valley tech firm Nvidia that are now outside the scope of US export controls.
The committee’s leadership, Representatives John Moolenaar, Republican of Michigan, and Raja Krishamoorthi, Democrat of Illinois, contended that DeepSeek had made “extensive use” of Nvidia’s H20 chip.
Nvidia saw its share price plummet on Monday – losing US$593 billion of the chipmaker’s market value, a record one-day loss for any company on Wall Street – as the market reacted to DeepSeek’s new low-cost AI models.
In recent weeks, DeepSeek has released two powerful new AI models built at a fraction of the cost and computing power used by American firms to create the technology underpinning generative AI services like ChatGPT.
Speaking on the Senate floor on Monday, Chuck Schumer of New York, the Senate Democratic leader, called the startling development from DeepSeek “AI’s Sputnik moment for America” and pledged to make AI a “top priority” for Congress. In 2023, Schumer established the Senate’s first working group on artificial intelligence.
House Speaker Mike Johnson also appeared to warn against DeepSeek on Monday, stating that China “abuse[s] the system, they steal our intellectual property”, adding “they’re now trying to get a leg up on us in AI”.
The House has since banned its staff from installing DeepSeek on official devices, US outlet Axios reported on Thursday, underscoring the concern among lawmakers.