Just when Silicon Valley giants OpenAI and Google thought there was no match for their dominance in the artificial intelligence landscape, a Chinese start-up came as an unexpected disruptor. DeepSeek, which started as a finance-focused hedge fund, is suddenly a force to reckon with – because its AI model is powerful, efficient and most importantly affordable.
Finance to AI
DeepSeek’s journey began in the financial sector under its parent company, High-Flyer, a hedge fund specialising in quantitative trading. Unlike traditional AI research firms, DeepSeek’s initial focus was leveraging machine learning to analyse China’s volatile stock market. But regulatory crackdowns in 2021 compelled it to pivot away from speculative trading and step into the AI space.
By prioritising research over commercial fanfare, DeepSeek developed an AI model that claims to rival OpenAI’s offerings but at a fraction of the cost. The firm reportedly trained its model for just $6 million, significantly lower than the estimated $100 million expenditure behind OpenAI’s GPT-4.
Rise of DeepSeek
DeepSeek’s new AI assistant, launched on January 20, quickly became the most downloaded free app on Apple’s App Store. The AI is optimised for tasks like math and coding, making it a strong competitor in the AI space.
Unlike many Western models, DeepSeek follows China’s strict censorship rules. When asked about sensitive topics, it avoids direct answers, reflecting government control over digital content. Despite this, experts praise its efficiency, as it uses advanced and lower-grade chips to deliver high performance at a lower cost.
DeepSeek’s vision
DeepSeek’s founder, Liang Wenfeng, a Zhejiang University graduate with a background in electronic engineering and computer science, built his reputation in the finance sector before venturing to AI. He has been vocal about China’s need to innovate rather than imitate, claiming that the real gap between Chinese and American AI lies in originality.
His ambitions align with Chinese President Xi Jinping’s push to make AI a national priority.
Global reactions
DeepSeek’s rise has not gone unnoticed by global markets and policymakers. The launch of its AI assistant coincided with a historic $600 billion market value drop for Nvidia, a key player in AI chip production. The US government’s ongoing restrictions on advanced chip exports to China have raised concerns about Beijing’s technological independence, yet DeepSeek’s success suggests that China is rapidly advancing despite these barriers.
Even US President Donald Trump acknowledged the development, calling it a “wake-up call” for American tech firms. Australia’s science minister, Ed Husic, has warned about potential security risks associated with the app, pointing out the need for scrutiny in data privacy and AI ethics.