What is DeepSeek? The Chinese Startup Redefining AI and Challenging Global Giants

BEIJING, Jan 27 – DeepSeek, a Chinese AI startup, is making waves in the global technology landscape. With its latest AI models—hailed as rivals to or even superior to leading models in the U.S.—the company has introduced groundbreaking advancements at a fraction of the cost. This has positioned DeepSeek as a formidable player in the artificial intelligence (AI) sector, challenging the established order.

One of the company’s most notable achievements is its ability to achieve exceptional results while significantly cutting costs. For instance, its flagship model, DeepSeek-V3, was reportedly trained with less than $6 million in computing power using Nvidia H800 chips. This efficiency, combined with the capabilities of its models, has captured the attention of global tech experts, particularly as DeepSeek’s AI Assistant has quickly become the top-rated free application on Apple’s App Store in the United States, surpassing the likes of ChatGPT.

However, this disruptive innovation has also sparked skepticism, particularly from industry leaders and analysts. Despite doubts, DeepSeek continues to make headlines as a company pushing the boundaries of AI innovation.

Why DeepSeek is Shaking Up the AI Industry

The global AI race accelerated significantly following the release of ChatGPT in late 2022, prompting companies worldwide to develop their own AI-powered tools. In China, this led to a wave of development by major tech firms aiming to catch up with their U.S. counterparts. However, the initial offerings from Chinese companies, such as Baidu’s AI chatbot, were met with widespread disappointment due to a perceived gap in capabilities.

DeepSeek has completely changed the narrative. The quality and cost-efficiency of its models, particularly DeepSeek-V3 and DeepSeek-R1, have impressed industry experts and Silicon Valley executives alike. The company claims that its models match or outperform leading AI systems created by companies like OpenAI and Meta. Furthermore, they offer a substantial cost advantage—DeepSeek-R1 is reportedly 20 to 50 times cheaper to use than OpenAI’s comparable model, depending on the task.

This combination of high performance and affordability has placed DeepSeek in a unique position to compete against some of the most prominent AI companies globally. However, critics have raised concerns about the company’s claims. Some analysts and competitors have questioned the transparency of DeepSeek’s costs and resource availability. For instance, allegations have surfaced suggesting the company might possess advanced hardware that violates international export controls. While DeepSeek has not publicly addressed these claims, such controversies underscore its disruptive presence in the AI sector.

Who is Behind DeepSeek?

DeepSeek was founded in Hangzhou and is primarily owned by Liang Wenfeng, a co-founder of the quantitative hedge fund High-Flyer. Liang’s background in finance and technology is reflected in DeepSeek’s strategic approach to AI development. In 2023, Liang transitioned High-Flyer’s focus from trading to cutting-edge AI research, leading to the creation of DeepSeek.

High-Flyer has been a key supporter of DeepSeek, providing resources and expertise essential for its operations. The hedge fund reportedly owns a cluster of 10,000 Nvidia A100 chips, which are used in training advanced AI models. This infrastructure has enabled DeepSeek to build and optimize its systems efficiently, contributing to its success in producing high-performing models at lower costs.

While the financial details of High-Flyer’s investment in DeepSeek remain undisclosed, the partnership has clearly played a vital role in propelling the startup to prominence. The collaboration reflects a broader trend of financial institutions and tech companies joining forces to accelerate innovation in the AI space.

DeepSeek and Its Impact on China’s AI Goals

DeepSeek’s rapid rise has not gone unnoticed by Chinese policymakers. The company’s success aligns with Beijing’s strategic objectives of achieving technological self-reliance and reducing dependence on foreign imports, particularly in critical sectors like AI.

The release of DeepSeek-R1 was marked by significant attention from government officials. Founder Liang Wenfeng’s attendance at a high-level symposium hosted by Chinese Premier Li Qiang underscores the importance of DeepSeek’s work to national goals. Such events often spotlight key contributors to China’s industrial ambitions, and Liang’s inclusion signals the government’s recognition of DeepSeek as a critical player in advancing the nation’s AI capabilities.

China’s broader push for self-sufficiency in AI has gained momentum in recent years, especially in response to export restrictions imposed by the U.S. on advanced chips and other key technologies. DeepSeek’s ability to innovate within these constraints has positioned it as a symbol of resilience and progress, fostering optimism about the country’s ability to compete in the global AI market.

The Road Ahead for DeepSeek

DeepSeek’s rise has ignited both excitement and debate within the tech community. On the one hand, the company represents a shift in the balance of power in the AI sector, challenging the dominance of established players in the U.S. On the other hand, questions about transparency and the feasibility of its claims highlight the challenges of navigating such a competitive and scrutinized industry.

As DeepSeek continues to innovate and expand, its success will likely serve as a catalyst for further advancements in AI, both in China and globally. Whether it can sustain its momentum and address the concerns raised by critics remains to be seen. However, one thing is clear: DeepSeek has already made a significant impact on the AI landscape, and its story is far from over.