How DeepSeek erased Silicon Valley’s AI lead and wiped $1 trillion from U.S. markets

The U.S. innovates, China iterates. That aphorism—or its less flattering version, “China imitates”—dominates many conversations about the relative strengths of the world’s largest and second-largest economies. The U.S., the narrative goes, sits on the technological frontier, creating groundbreaking products and services that chart the course of the world economy. China takes those ideas and builds on them, spitting out cheaper—and perhaps inferior—versions.

In AI, that cliché seemed for years to be based in fact...