With around six million dollars and a stockpile of chips acquired before Washington banned their export to China, startup DeepSeek has produced what Chinese tech titans couldn't -- a world-class AI chatbot.

The success will come with heightened scrutiny, both from Western governments with long-held suspicions about Chinese technology but also from Beijing, whose stern regulatory crackdown on the sector, though eased in 2022, still has a chilling effect.

After surging ahead in the global artificial intelligence race this week, DeepSeek faces an uncertain future in its home country.

In 2020, Beijing unleashed a severe regulatory campaign against China's sprawling tech sector, which officials feared was growing beyond its control.

The crackdown saw authorities intensify local compliance efforts and slap eye-watering fines on domestic champions including Alibaba and Tencent for alleged monopolistic behaviour.

Beijing finally relented after a dire sell-off of Chinese tech stocks in March 2022.

But the sector has yet to find its way back to the flourishing growth of its boom years.

And China's leaders have since stressed their desire for the country to become a world AI leader,........

© International Business Times