What is DeepSeek AI?

DeepSeek AI is a Chinese artificial intelligence company that has rapidly emerged as a disruptive AI.

It challenges established players like OpenAI's ChatGPT with cost-efficient, open-source models.

Founded in 2023 by Liang Wenfeng, a Zhejiang University graduate and co-founder of quantitative hedge fund High-Flyer Capital, the company is headquartered in Hangzhou and operates as an independent AI research lab under High-Flyer's umbrella.

Deepseek Founding and Background

The company gained international attention in January 2025 when its chatbot app topped U.S. app stores, surpassing ChatGPT in downloads within a week of release.

DeepSeek originated from High-Flyer's AI research initiatives in 2023, initially focusing on AI-driven trading algorithms before expanding into general-purpose AI models.

Liang Wenfeng leveraged a reported stockpile of 50,000 Nvidia A100 chips (acquired before U.S. export restrictions) combined with lower-end alternatives to build DeepSeek's infrastructure.

Deepseek AI is Innovation in AI

DeepSeek's breakthroughs challenge conventional AI in:

• Cost Efficiency: Its flagship DeepSeek-R1 model was developed for $6 million, compared to $100 million for OpenAI's GPT-4, using novel architectures like multi-head latent attention and mixture-of-experts (MoE).
• Technical Architecture: Combines compressed latent vectors for memory efficiency with a dual MoE system (shared always-active experts and specialized routed experts).
• Open-Source Approach: All models are released under open-source licenses, enabling free public use and modification[3][4].

Deepseek AI models

Key developments in DeepSeek's model timeline include:

The R1 model specifically matches GPT-4's performance at 10% of the computational cost, triggering an AI pricing war that forced Chinese tech giants like Alibaba and Tencent to slash their model prices.

DeepSeek AI Impact on Market

• Caused a 18% drop in Nvidia's stock price and broader tech sector selloffs in January 2025
• Prompted VC strategy shifts toward leaner AI startups.
• Accelerated China's AI adoption across industries from finance to manufacturing.

Deepseek AI Challenges and Controversies

• Faces scrutiny over compliance with Chinese censorship requirements, including restrictions on topics like Taiwan and Tiananmen Square.
• Banned from Australian government devices in 2024 over privacy concerns.
• Relies on older Nvidia H800 chips due to U.S. export controls

DeepSeek's rise demonstrates how architectural innovation can disrupt resource-intensive AI development, though its long-term trajectory remains tied to geopolitical tensions and evolving regulatory landscapes.