But the story of DeepSeek also reveals just how much Chinese technological development continues to depend on the United States. DeepSeek used chips from the U.S. giant Nvidia to create its model, and, as it turns out, may have also tapped American data to train it. Washington can capitalize on that advantage to choke off Chinese tech firms.

Robust gains by Chinese tech stocks have added billions of dollars in their market capitalization, driven by the sudden rise to fame by homegrown AI app DeepSeek.

China’s growing clout in the artificial intelligence space has sparked a wave of optimism toward the nation’s tech shares, with a gauge entering a bull market and brokers issuing upbeat calls.