The economic hardware/software debate about China just got more complicated. Before DeepSeek flipped the script on the artificial intelligence game, many economists worried China had way too much of the former and not enough of the latter.

Government policies, generous funding and a pipeline of AI graduates have helped Chinese firms create advanced LLMs.

Social media exploded in a celebration after the news that a Chinese start-up had made an artificial intelligence tool that was more efficient than any in the United States.