DeepSeek, a Chinese AI startup, has rapidly gained prominence by developing cost-effective and efficient AI models, challenging established American tech giants. Its success, particularly with its V3 and R1 models, is attributed to innovative training methods and a partially open-source approach. However, this has sparked controversy regarding the use of knowledge distillation potentially leveraging US technology and raised concerns about intellectual property, ethical implications, and the influence of Chinese government censorship. The situation has prompted a reevaluation of strategies by US companies, including a potential shift towards greater openness, and highlights the evolving dynamics of the global AI market.