The rapid rise of Chinese AI startup DeepSeek has boosted the adoption of open-source low-cost AI models in China, putting pressure on leading U.S. competitors with higher-cost, proprietary models.

The Biden administration imposed sweeping export controls against China, encompassing everything from semiconductors to supercomputers under the so-called "small yard, high fence" policy. The approach aims to place restrictions on a small number of technologies with significant military potential while maintaining normal economic exchange in other areas.