Us must be quick to react. They have lost manufacturing challenge versus NVDA, that was able to build significant moats in the manufacturing and infrastructure running.
Us have some leeway in designing and programming AI. The "deepseek shock" (a.k.a. Sputnik moment) might not entirely be negative in that retrospect.
Defiantly US will be developing something to counter the latest AI Chinese product and it will be interesting to see how long US will take to roll out the response. A month has passed and NVIDIA stock still unable to regain the value (i.e. $142), it start falling on Jan 24, 2025. China must also be well aware of the fact that DeepSeek might be powerful but it's their only recognised global product in AI domain. So job is not done for China also rather a global AI race has started and time will tell who will dominate this domain.