How DeepSeek, Chinese AI is buzzing in tech and shaking up ChatGPT, Nvidia

The tech world is buzzing about Chinese startup DeepSeek’s new artifical intelligence (AI) models, which it says are as good as or better than the top US models, but cost much less.

The company caught global attention after revealing that training its DeepSeek-V3 model only cost under $6 million using Nvidia H800 chips.

DeepSeek's AI Assistant, powered by DeepSeek-V3, has now become the top free app on Apple's App Store in the United States, surpassing ChatGPT.

This has raised doubts about why US tech companies are investing billions in AI, with stocks of big companies, including Nvidia, seeing a decline.

What is DeepSeek and why is it making a buzz?

DeepSeek is an AI platform that provides advanced artificial intelligence models, particularly for tasks such as natural language processing, data analysis, and various machine learning applications.

Its models, such as DeepSeek-V3 and DeepSeek-R1, are designed to be highly efficient, cost-effective, and capable of handling complex tasks with high accuracy.

The release of OpenAI's ChatGPT in late 2022 triggered a race among Chinese tech firms to develop their own AI-powered chatbots. However, after Baidu, the search engine giant, launched its first Chinese equivalent of ChatGPT, there was widespread disappointment in China due to the gap in AI capabilities between US and Chinese firms.

DeepSeek has changed this narrative with its models, DeepSeek-V3 and DeepSeek-R1, which have been praised by Silicon Valley executives and US tech engineers alike. The Chinese startup claims these models are on par with OpenAI and Meta's most advanced offerings.

Moreover, they are much more cost-effective. The newly released DeepSeek-R1 is 20 to 50 times cheaper to use than OpenAI's GPT-3 model, depending on the task, as per a post on DeepSeek's official WeChat account.

Who is Liang Wenfeng, the man behind DeepSeek?

DeepSeek, a startup based in Hangzhou, is controlled by Liang Wenfeng, co-founder of the quantitative hedge fund High-Flyer, according to Chinese corporate records.

In March 2023, Liang’s fund announced a shift in focus on its official WeChat account, moving away from trading to creating a "new and independent research group" focused on Artificial General Intelligence (AGI). DeepSeek was founded later that year as part of this new direction.

OpenAI, the creators of ChatGPT, defines AGI as autonomous systems capable of exceeding human performance in most economically valuable tasks.

It’s unclear how much High-Flyer has invested in DeepSeek. The two companies share office space, and High-Flyer holds patents for chip clusters used in training AI models, according to corporate records. In July 2022, the fund’s AI division revealed on WeChat that it operates a cluster of 10,000 A100 chips.

What’s behind DeepSeek’s rise in China?

DeepSeek’s success has caught the attention of China’s top political figures. On January 20, the same day DeepSeek-R1 was launched, founder Liang Wenfeng participated in a closed-door symposium for business leaders and experts hosted by Chinese Premier Li Qiang, as reported by state news agency Xinhua.

Liang’s involvement in the event signals that DeepSeek’s achievements could align with Beijing’s goal of overcoming U.S. export restrictions and achieving self-sufficiency in key sectors like AI.

A similar symposium in the previous year was attended by Baidu CEO Robin Li.

With Reuters inputs