China proposed pre-approval for exporting frontier models, and the US barred DeepSeek from federal procurement. At the same time DeepSeek open-sourced its inference stack DeepInfer, estimated to earn up to 90 percent gross margin on token sales.
China's commerce ministry MOFCOM has put forward a policy proposal requiring pre-approval before frontier models and some other technologies can be shared internationally, though the draft states open-source technology would be approved automatically. In the United States, the Department of Homeland Security issued an order barring DeepSeek, as a company and as a technology platform, from federal civilian procurement, leaving unclear how derivative models such as Nvidia's Nemotron line, which relies heavily on DeepSeek outputs, will be treated. DeepSeek responded by releasing its internal inference stack, DeepInfer, along with a new model, V4.1 Flash, with 552 billion parameters under an MIT license.
Estimates suggest DeepSeek earns up to 90 percent gross margin selling tokens through its own inference stack, since DeepInfer runs more efficiently than common open tools such as vLLM or SGLang. American alternatives are gaining ground too: Reflection released Beam-1.0-501B-A23B, the strongest open American model under a permissive Apache 2.0 license, while Xiaomi's MiMo-V2.6-Pro-RL currently tops Artificial Analysis rankings for open models. For companies this means choosing an open model now depends as much on export rules and procurement limits as on performance or license terms.
Some observers see the Chinese proposal as less dramatic than headlines suggest, since open-source technology would be approved automatically, and argue it may target deals such as the sale of startup Manus to Western buyers rather than frontier models broadly. It remains open how quickly the American open model ecosystem, including Reflection, Meta and Nvidia, can close the gap with Chinese models while both sides expand their own controls.
What this means for decision-makers
- Check whether models you use come from DeepSeek or other listed vendors and whether procurement rules apply.
- Track the MOFCOM export rules, even though open-source models are meant to get automatic approval for now.
- Compare license terms such as MIT and Apache 2.0 before adopting open models in your products.
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