How DeepSeek set the internet buzz!
This week, a Chinese AI lab captured global attention as its chatbot app, DeepSeek, soared to the top of the Apple App Store charts. Powered by compute-efficient AI models, the app has sparked discussions among Wall Street analysts and AI enthusiasts alike about the U.S.’s ability to maintain its edge in the AI race and the surging demand for AI hardware. But what’s the story behind its rapid rise, and what factors fueled its explosive success?
The Origins of DeepSeek
DeepSeek owes its beginnings to High-Flyer Capital Management, a Chinese quantitative hedge fund that relies on AI to drive its trading strategies. Founded in 2015 by Liang Wenfeng, an AI visionary, High-Flyer initially focused on applying machine learning to financial markets. Wenfeng, who first experimented with trading algorithms while studying at Zhejiang University, later launched High-Flyer Capital Management as a dedicated hedge fund in 2019.
In 2023, the firm increased its focus by launching DeepSeek as an independent lab to explore AI technologies beyond finance. With support from High-Flyer, DeepSeek rapidly became a standalone company, that built its own data centers to provide training on advanced AI models. Similarly! to other Chinese AI firms, DeepSeek has encountered challenges from U.S. export controls and has adapted by utilizing Nvidia’s latest H800 chips, a less powerful alternative to the H100 chips available to American companies.
DeepSeek’s workforce is known for its youthful dynamism, with the company aggressively recruiting AI PhD talent from top Chinese universities. To enhance its models’ versatility, it also hires individuals from non-technical fields to diversify its knowledge base.
DeepSeek’s Pioneering Models
DeepSeek debuted its first models—DeepSeek Coder, DeepSeek LLM, and DeepSeek Chat—in late 2023. But it wasn’t until spring 2024 that the industry truly took notice. The release of the DeepSeek-V2 models, which excel at analyzing text and images, set a new benchmark for efficiency and cost-effectiveness. These advancements forced domestic rivals like ByteDance and Alibaba to lower prices on their AI services, with some even offering free usage.
DeepSeek’s momentum persisted with the December 2024 launch of DeepSeek-V3, which, according to internal tests, outperformed both Meta’s Llama and OpenAI’s GPT-4.
In January 2025, DeepSeek launched its R1 reasoning model, adding another achievement to its portfolio. Frequently mentioned in the “DeepSeek R1 blog,” this model is specifically designed to verify its outputs, ensuring high reliability for scientific, mathematical, and logical tasks. While reasoning models like R1 may take several minutes to produce results, their accuracy makes them essential for complex problem-solving.
However, like other Chinese AI technologies, DeepSeek’s models are subject to strict oversight by China’s regulators. These requirements ensure the models align with “core socialist values,” limiting their ability to discuss politically sensitive topics like Tiananmen Square or Taiwan’s independence.
Abliteration and Industry Disruption
“DeepSeek abliteration” refers to the disruption from the company’s AI advancements that are challenging industry norms. DeepSeek’s business model is unconventional; many services are priced below market averages, while others are free. The company attributes this strategy to its efficiency gains, though some experts question these claims.
Despite skepticism, developers have embraced DeepSeek’s models. While not traditionally open source, the models are available under permissive licenses that allow for commercial applications. Clem Delangue, CEO of Hugging Face, reported that over 500 derivative models of R1 have been created on the platform, accumulating 2.5 million combined downloads.
DeepSeek’s emergence has disrupted the AI industry, posing a challenge to larger competitors and sparking a new wave of innovation. Its influence is also seen in the hardware sector, with companies like Radeon considering collaborations to support next-gen DeepSeek models. This collaboration, termed “Ollama DeepSeek Radeon,” may redefine AI model deployment.
What’s Next?
The future is uncertain. As the lab refines its models, geopolitical tensions and regulatory challenges may influence its path. The U.S. government has raised concerns about foreign AI risks, potentially resulting in stricter oversight of DeepSeek’s operations.
In the rapidly evolving and dynamic landscape of artificial intelligence, DeepSeek has emerged as a significant disruptive force within the industry. However, as the environment continues to shift and present new challenges, the company’s capacity to sustain this positive momentum and navigate potential obstacles remains uncertain and calls into question its long-term viability.
