U.S. companies were spooked when the Chinese startup released models said to match or outperform leading American ones at a fraction of the cost.

The Chinese startup DeepSeek released an AI reasoning model that appears to rival the abilities of a frontier model from OpenAI, the maker of ChatGPT.

DeepSeek has Silicon Valley in awe and investors in a frenzy.The Chinese artificial-intelligence upstart has shot to prominence after saying it had trained high-performing AI models cheaply, without the most advanced chips.

DeepSeek, a Chinese artificial-intelligence startup that’s just over a year old, has stirred awe and consternation in Silicon Valley after demonstrating AI models that offer comparable performance to the world’s best chatbots at seemingly a fraction of their development cost.