- DeepSeek has gone viral.
Chinese AI lab DeepSeek made headlines this week after its chatbot app surged to the top of the Apple App Store and Google Play charts. Known for its compute-efficient AI models, DeepSeek has sparked discussions among Wall Street analysts and tech experts about the U.S.’s ability to maintain its dominance in the AI race and the long-term demand for AI chips.
- But how did DeepSeek emerge, and what propelled its rapid rise to global recognition?
DeepSeek’s roots trace back to trading.
DeepSeek is supported by High-Flyer Capital Management, a Chinese quantitative hedge fund that leverages AI to guide its trading strategies.
High-Flyer was co-founded in 2015 by AI enthusiast Liang Wenfeng, who reportedly developed an interest in trading while studying at Zhejiang University. In 2019, Wenfeng established High-Flyer Capital Management as a hedge fund specializing in AI-driven algorithmic trading.
In 2023, High-Flyer launched DeepSeek as a dedicated AI research lab, operating independently from its financial activities. With High-Flyer as an investor, the lab later evolved into an independent entity under the same name.
From its inception, DeepSeek built its own data center clusters for model training. However, like many AI firms in China, it has faced challenges due to U.S. export restrictions on advanced hardware. To train one of its more recent models, DeepSeek had to rely on Nvidia H800 chips— a less powerful alternative to the H100 chips available to U.S. companies.
DeepSeek’s technical team is known for its youthful composition, with the company actively recruiting PhD-level AI researchers from top Chinese universities. Additionally, DeepSeek hires individuals without a computer science background to enhance its AI systems’ understanding of diverse subject areas, according to The New York Times.
DeepSeek’s strong models
DeepSeek introduced its first models—DeepSeek Coder, DeepSeek LLM, and DeepSeek Chat—in November 2023. However, it wasn’t until the release of its next-generation DeepSeek-V2 family in the spring of 2024 that the AI industry truly took notice.
DeepSeek-V2, a versatile text- and image-processing system, delivered strong performance across various AI benchmarks while being significantly more cost-effective than competing models at the time. Its efficiency pressured domestic rivals, including ByteDance and Alibaba, to lower usage fees for some of their models and make others entirely free.
- The launch of DeepSeek-V3 in December 2024 further cemented DeepSeek’s reputation.
According to the company’s internal benchmark tests, DeepSeek-V3 outperforms both openly available downloadable models, such as Meta’s Llama, and proprietary API-accessible models like OpenAI’s GPT-4o.
- Equally noteworthy is DeepSeek’s R1 “reasoning” model, released in January 2025.
A disruptive approach
If DeepSeek has a business model, it’s not clear what that model is, exactly. The company prices its products and services well below market value — and gives others away for free.
The way DeepSeek tells it, efficiency breakthroughs have enabled it to maintain extreme cost competitiveness. Some experts dispute the figures the company has supplied, however.
Whatever the case may be, developers have taken to DeepSeek’s models, which aren’t open source as the phrase is commonly understood but are available under permissive licenses that allow for commercial use. According to Clem Delangue, the CEO of Hugging Face, one of the platforms hosting DeepSeek’s models, developers on Hugging Face have created over 500 “derivative” models of R1 that have racked up 2.5 million downloads combined.
DeepSeek’s success against larger and more established rivals has been described as “upending AI” and “over-hyped.” The company’s success was at least in part responsible for causing Nvidia’s stock price to drop by 18% on Monday, and for eliciting a public response from OpenAI CEO Sam Altman.
Microsoft announced that DeepSeek is available on its Azure AI Foundry service, Microsoft’s platform that brings together AI services for enterprises under a single banner. When asked about DeepSeek’s impact on Meta’s AI spending during its first-quarter earnings call, CEO Mark Zuckerberg said spending on AI infrastructure will continue to be a “strategic advantage” for Meta.
At the same time, some companies are banning DeepSeek, and so are entire countries and governments, including South Korea. New York state also banned DeepSeek from being used on government devices.
As for what DeepSeek’s future might hold, it’s not clear. Improved models are a given. But the U.S. government appears to be growing wary of what it perceives as harmful foreign influence.
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This story was originally published January 28, 2025, and will be updated continuously with more information.
Frequently Asked Questions
What is DeepSeek?
DeepSeek is an AI-powered chatbot app designed to assist users with various tasks, including answering questions, generating content, and providing real-time assistance.
How does DeepSeek work?
DeepSeek uses advanced AI models to understand user queries and generate relevant responses. It leverages machine learning and natural language processing (NLP) to improve its accuracy over time.
Is DeepSeek free to use?
DeepSeek offers both free and premium plans. The free version provides basic chatbot functionalities, while the premium version includes enhanced features like faster response times and advanced AI capabilities.
What are the key features of DeepSeek?
DeepSeek includes real-time conversation, content generation, multilingual support, integration with various platforms, and AI-powered task automation.
Can DeepSeek be used for business purposes?
Yes, DeepSeek can assist businesses by automating customer support, generating marketing content, handling inquiries, and improving workflow efficiency.
Is my data safe with DeepSeek?
DeepSeek follows strict data privacy policies, ensuring that user information is encrypted and not shared with third parties without consent.
Can I integrate DeepSeek with other applications?
Yes, DeepSeek can be integrated with messaging platforms, customer service software, and productivity tools to enhance workflow automation.
Does DeepSeek support multiple languages?
Yes, DeepSeek supports multiple languages, allowing users to communicate in their preferred language seamlessly.
How can I download and install DeepSeek?
DeepSeek is available for download on iOS, Android, and as a web-based application. Users can access it from the official website or app stores.
How do I contact DeepSeek support?
Users can reach DeepSeek support through the in-app help section, official website, or by emailing the customer service team for assistance.
Conclusion
DeepSeek, a Chinese AI startup, has developed a cost-effective chatbot rivaling leading models like OpenAI’s ChatGPT. Launched in January 2025, DeepSeek-R1 quickly became the most downloaded free app on the U.S. iOS App Store, surpassing ChatGPT. Its development cost was approximately $5.6 million, significantly lower than competitors, achieved by utilizing less advanced hardware. This efficiency has disrupted the AI industry, prompting discussions about the sustainability of current business models and leading to substantial market shifts, including a historic $593 billion drop in Nvidia’s valuation.
