DeepSeek, Huawei, Export Controls, and the Future of the U.S.-China AI Race

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CSIS·csis.org/analysis/deepseek-huawei-export-controls-and-fut...

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High(4)

High quality. Established institution or organization with editorial oversight and accountability.

Rating inherited from publication venue: CSIS

Relevant for understanding how geopolitical compute restrictions interact with AI capabilities development, and whether hardware-focused governance strategies remain viable as algorithmic efficiency improves.

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Importance: 62/100organizational reportanalysis

Summary

This CSIS analysis examines how DeepSeek's emergence and Huawei's chip development challenge the effectiveness of U.S. export controls on advanced semiconductors. It assesses whether restricting China's access to cutting-edge chips can sustainably constrain Chinese AI capabilities, and considers implications for the broader U.S.-China AI competition.

Key Points

•DeepSeek demonstrated that competitive AI models can be trained with fewer high-end chips, undermining assumptions behind U.S. export control strategy.
•Huawei is developing domestic AI chips (Ascend series) that may reduce China's dependence on restricted Nvidia hardware over time.
•Export controls may slow but not stop Chinese AI progress, as algorithmic efficiency and domestic hardware investment offer workarounds.
•The analysis calls for a reassessment of U.S. semiconductor export policy to address gaps exposed by DeepSeek's training methodology.
•The U.S.-China AI race increasingly involves competition over software efficiency and talent, not just raw compute access.

Cited by 2 pages

Page	Type	Quality
AI Safety Multi-Actor Strategic Landscape	Analysis	79.0
US AI Chip Export Controls	Policy	73.0

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DeepSeek, Huawei, Export Controls, and the Future of the U.S.-China AI Race 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
 
 

 

 
 
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 DeepSeek, Huawei, Export Controls, and the Future of the U.S.-China AI Race 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 

 
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 Report
 by 
 
 Gregory C. Allen 
 
 
 

 Published March 7, 2025

 
 

 

 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
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 Introduction 

 Six months ago, few in the West aside from obsessive AI professionals had heard of DeepSeek, a Chinese AI research lab founded barely more than a year and a half ago. Today, DeepSeek is a global sensation attracting the attention of heads of state, global CEOs, top investors, and the general public.

 With the release of its R1 model on January 20, 2025—the same day as President Trump’s second inauguration—DeepSeek has cemented its reputation as the top frontier AI research lab in China and caused a reassessment of assumptions about the landscape of global AI competition. By January 27, DeepSeek’s iPhone app had overtaken OpenAI’s ChatGPT as the most-downloaded free app on Apple’s U.S. App Store. The stock prices of some U.S. tech companies briefly tumbled, including the AI chip designer Nvidia, which lost more than $600 billion off its valuation in a single day. (AI chips are also known as graphics processing units, or GPUs, and the terms are used interchangeably in this report.)

 ChatGPT has again overtaken DeepSeek in app store rankings, and Nvidia’s stock price has since mostly recovered . However, investor interest in Chinese tech companies has grown significantly and remains elevated. DeepSeek is now even reportedly seeking investment from venture capital firms.

 As a sector, AI is prone to overreactions and wild swings in perception. One might think that the story of DeepSeek is just another overblown AI hype cycle. However, the extraordinary attention focused on DeepSeek is justified, even if the conclusions some have drawn from its success are not. It would be a great mistake for U.S. policymakers to ignore DeepSeek or to suggest that its accomplishments are merely a combination of intellectual property theft and misleading Chinese propaganda. Policymakers need to understand that—even while DeepSeek has in some cases simply implemented innovations already known to U.S. AI companies—DeepSeek has also demonstrated genuine technological breakthroughs of its own. These facts deserve careful consideration as the second Trump administration sets its AI policy agenda.

 This paper provides an overview of DeepSeek’s origins and achiev

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