
DeepSeek is an artificial intelligence (AI) research lab based in Hangzhou, founded in 2023 by Liang Wenfeng, an engineer with a background in AI and quantitative finance.
The company’s latest AI model, the R1, has gained attention for its high performance and cost efficiency, reported the Economic Times.
Before starting DeepSeek, Liang led a hedge fund focused on using AI to analyse financial data. His team at DeepSeek consists largely of fresh graduates from top Chinese universities, including Tsinghua and Peking University.
Development of open-source AI models
DeepSeek has developed open-source AI models, including the DeepSeek-V3 model, which powers its R1. These models are credited with being far more cost-effective and developed for under $6 million.
This cost efficiency has allowed DeepSeek to offer its AI models for free, making them highly accessible to developers globally.
R1's rise
DeepSeek's R1 has surpassed OpenAI’s ChatGPT to become the top-rated free app on Apple's App Store in several countries, including the United States (US), the United Kingdom (UK), and China.
Its success has challenged the US's dominance in AI, making a significant impact in Silicon Valley.
Key features of R1
The DeepSeek R1 model offers several standout features, including the ability to provide reasoning before answering prompts, which sets it apart from other AI models. It rivals leading models like those from OpenAI and Anthropic but with the added benefits of being open-source and offering unlimited free usage.
Cost-effectiveness and accessibility
DeepSeek’s AI models are developed at a fraction of the cost compared to competitors from OpenAI and Meta, raising questions about the need for expensive AI accelerators like Nvidia’s.
The free availability of R1 makes it the first highly advanced AI system accessible to everyone, unlike paid systems from other companies like OpenAI and Google.
Efficiency
DeepSeek has gained attention for its transparency, efficiency, and ability to make advanced AI accessible.
This breakthrough is particularly notable given the US restrictions on semiconductor exports to China, which DeepSeek has managed to bypass by creating models that require fewer resources.
Market impact
DeepSeek’s success has had an immediate effect on stock markets, causing drops in the shares of US AI companies such as Nvidia, Meta, and Microsoft. Analysts warn that the rise of low-cost Chinese alternatives could disrupt the AI investment landscape and force companies to rethink their strategies.