Chinese AI startup DeepSeek’s release of AI reasoning model R1 sent NVIDIA and other tech  stocks tumbling yesterday as investors questioned whether U.S. companies were spending too much on AI development. That’s because DeepSeek claims it made this model for only $6 million, a fraction of the hundreds of millions that OpenAI spent making o1, its nearest competitor. Any news coming out of China should be viewed with appropriate skepticism, but R1 nonetheless challenges the conventional American wisdom about AI development—massive computing power and unprecedented investment will maintain U.S. AI supremacy.

The timing couldn't be more relevant. Just last week, President Trump unveiled Stargate, a $500 billion public-private partnership with OpenAI, Oracle, SoftBank, and Emirati investment firm MGX aimed at building AI infrastructure across America. Meanwhile, U.S. efforts to preserve its technological advantage through export controls face mounting challenges and skepticism. If Chinese companies can innovate despite restrictions on advanced AI chips, should the U.S. rethink its approach?

To make sense of these developments and their implications for U.S. technological leadership, Evan is joined by Tim Fist, Senior Technology Fellow at the Institute for Progress, a think tank focused on accelerating scientific, technological, and industrial progress, and FAI Senior Economist Sam Hammond.