A Chinese AI model built on a shoestring budget has shocked Silicon Valley and presented a major challenge to Donald Trump.

DeepSeek, a language model that can generate human-like conversation, was released on the same day as Mr Trump’s inauguration.

It has since been tested against some of America’s most powerful AI (artificial intelligence) models, such as chatGPT, and in some cases has come out on top.

Experts warned that the breakthrough was a “wake-up call to America”, which has been battling to prevent China competing at the top level of an AI arms race.

Concerns have also been raised that DeepSeek has built-in censorship and refuses to answer sensitive political questions about China and Xi Jinping, the country’s leader.

Shortly after his inauguration, Mr Trump announced a $500 billion (£400 billion) AI investment project, dubbed “Stargate”, in co-operation with US firms including OpenAI, which created ChatGPT.

DeepSeek’s new model comes despite a plan by Joe Biden’s administration to hamper China’s AI capabilities, in hopes of denying it the political influence and military supremacy which could come from being the first to achieve what is known as superintelligence.