By Andrea Shalal, David Shepardson and Kanishka Singh WASHINGTON (Reuters) - U.S. officials are looking at the national security implications of the Chinese artificial intelligence app DeepSeek, White House press secretary Karoline Leavitt said on Tuesday,

Silicon Valley and Washington leaders said the app shows China can challenge the U.S. The Nasdaq lost 3 percent and chipmaker Nvidia shed $589 billion in market capitalization.

DeepSeek has delighted the Chinese internet ahead of Lunar New Year, the country's biggest holiday. It's good news for a beleaguered economy and a tech industry that is bracing for further tariffs and the possible sale of TikTok's US business.

DeepSeek founder is now considered an 'AI hero' in China, following the recent announcements made by the company that changed the AI race.

DeepSeek’s latest models, created by a small company with limited resources, are already beating many of the leading AI models in the United States.