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.

Top White House advisers this week expressed alarm that China's DeepSeek may have benefited from a method that allegedly piggybacks off the advances of U.S. rivals called "distillation." The technique,

The start-up had become a key player in the “Chinese Large-Model Technology Avengers Team” that would counter US AI dominance, said another. China’s delight, however, spelled pain for several giant US technology companies as investors questioned whether DeepSeek’s breakthrough undermined the case for their colossal spending on AI infrastructure.