Preface

DeepSeek is rapidly becoming a household name in the AI industry. This Chinese chatbot app has made significant waves by reaching the top of both Apple App Store and Google Play Store. Trained with compute-efficient techniques, DeepSeek's AI models are prompting questions about the sustainable future of AI in the U.S. and the subsequent demand for AI chips. With the backing of High-Flyer Capital Management, led by the AI enthusiast Liang Wenfeng, DeepSeek is consistently grabbing headlines and challenging established norms.

Lazy bag

DeepSeek's rise to prominence is fueled by its innovative models and competitive pricing strategies, forcing industry giants like ByteDance and Alibaba to reconsider their market approaches. Despite challenges like U.S. hardware bans, DeepSeek continues to innovate and captivate a global audience.

Main Body

The emergence of DeepSeek as an AI powerhouse is nothing short of remarkable. Founded as a lab separate from High-Flyer Capital Management, DeepSeek has quickly evolved into its own entity. From the outset, DeepSeek focused on building a robust infrastructure, setting up data center clusters dedicated to model training.

Despite facing U.S. export bans on critical hardware, the company has managed to train its models using Nvidia's H800 chips. These hurdles have not deterred DeepSeek; instead, they've propelled its technical team—comprised largely of young, enthusiastic AI researchers from top Chinese universities—to push the boundaries of AI development.

DeepSeek's impressive lineup of models includes the DeepSeek Coder, DeepSeek LLM, and DeepSeek Chat launched in late 2023. However, it was the introduction of the DeepSeek-V2 model family that truly captured the industry's attention. Renowned for its cost-efficiency and performance on AI benchmarks, DeepSeek-V2 compelled competitors to lower prices on their offerings and, in some cases, make them entirely free.

Following this success, DeepSeek launched the DeepSeek-V3 in December 2024. Internally, this model outperformed other available models, including Meta's Llama and OpenAI's GPT-4o. Additionally, DeepSeek's R1 model has set new standards in AI reasoning, effectively self-verifying outputs to avoid common pitfalls. However, governmental regulations in China require these models to align with "core socialist values," which affects their content's scope and delivery.

DeepSeek's popularity continues to soar, boasting over 16.5 million visits in March alone. Its business model remains ambiguous; pricing strategies undercut the competition, and many of its services are offered free of charge. This approach raises questions among experts regarding the sustainability and true efficiency of its operations.

Despite these uncertainties, DeepSeek's models have found favor with developers, who have generated over 500 derivative models on platforms like Hugging Face. Yet, DeepSeek's impact is not without controversy. Notably, it influenced a significant drop in Nvidia's stock and has drawn reactions from global tech leaders.

Politically, the tool has stirred concerns, leading to bans on governmental devices in regions including New York State and South Korea. While some regard DeepSeek as a "state-subsidized" initiative, others point to its promise of innovation in the AI sector. As it continues evolving, global scrutiny grows over both its capabilities and implications for international tech sovereignty.

Key Insights Table