DeepSeek AI: The Chinese AI Startup Disrupting the Industry
- 09/03/2025 18:14 PM
- Emma
A new name is shaking up the AI world: DeepSeek AI. This Chinese AI lab has gone viral after its chatbot app topped the Apple App Store and Google Play charts, quickly gaining global attention.
While DeepSeek was relatively unknown a year ago, its compute-efficient AI models are now making waves. Some experts even question whether the U.S. can maintain its lead in AI as China-backed companies like DeepSeek gain ground.
But where did DeepSeek come from, and how did it rise to prominence so fast?
The Origins of DeepSeek AI
DeepSeek was founded by High-Flyer Capital Management, a Chinese quantitative hedge fund that uses AI for trading and financial analysis.
🔹 Founded by AI enthusiast Liang Wenfeng in 2015
🔹 Started as a hedge fund in 2019 before launching DeepSeek in 2023
🔹 Built its own AI data center clusters to train its models
🔹 Faced U.S. chip export bans, forcing it to use Nvidia’s less powerful H800 chips instead of the advanced H100 chips available to U.S. companies
One of DeepSeek’s biggest advantages? Aggressive recruitment of top AI talent. The company actively hires PhD researchers from China’s best universities and even recruits non-computer science experts to improve its AI’s knowledge base.
DeepSeek’s AI Models: A New Era in AI Performance?
DeepSeek first launched its DeepSeek Coder, DeepSeek LLM, and DeepSeek Chat models in November 2023. But it wasn’t until the release of DeepSeek-V2 and DeepSeek-V3 that the AI world took notice.
DeepSeek’s Breakthrough AI Models
✅ DeepSeek-V2 – A text- and image-analyzing AI model that forced competitors like ByteDance and Alibaba to cut prices
✅ DeepSeek-V3 – Outperforms Meta’s Llama and rivals OpenAI’s GPT-4o in key benchmarks
✅ DeepSeek R1 – A reasoning model designed for fact-checking itself, making it more reliable for science, math, and physics
DeepSeek’s R1 model is particularly disruptive because it avoids many of the errors that traditional AI models make. However, reasoning models take longer to generate responses, sometimes adding seconds or minutes to response times.
The catch? DeepSeek’s models are subject to China’s internet regulations, meaning its chatbot won’t answer politically sensitive questions like Tiananmen Square or Taiwan’s independence.
How DeepSeek is Disrupting the AI Industry
DeepSeek has built its reputation by offering high-performing AI models at extremely low prices—sometimes even for free. This pricing strategy has forced competitors to cut prices and rethink their own AI business models.
But how is DeepSeek making money? That remains a mystery.
💰 DeepSeek’s Business Model (Or Lack of One?)
🔹 Ultra-low pricing – DeepSeek undercuts competitors by offering AI models at well below market value
🔹 Permissive licensing – Developers can use DeepSeek models for commercial use
🔹 Tech efficiency claims – DeepSeek says its AI models run on fewer GPUs, making them cheaper to operate
Some AI experts have challenged DeepSeek’s claims, arguing that its efficiency breakthroughs are exaggerated. However, one thing is clear: Developers love DeepSeek’s models.
On platforms like Hugging Face, DeepSeek’s models have been downloaded over 2.5 million times, with 500+ variations built by third-party developers.
DeepSeek’s Global Impact (And Controversy)
DeepSeek’s unexpected success has shaken up the AI industry, even affecting stock markets and AI investment strategies.
💥 How DeepSeek is Shaping the AI Industry:
- January 2025: Nvidia’s stock dropped 18% due to fears that DeepSeek’s efficient AI could reduce the demand for AI chips
- OpenAI’s Sam Altman publicly responded, acknowledging DeepSeek’s growing influence
- Microsoft partnered with DeepSeek, integrating it into Azure AI Foundry
- Meta’s CEO Mark Zuckerberg said DeepSeek’s impact wouldn’t slow Meta’s AI spending
Even Nvidia’s CEO Jensen Huang acknowledged DeepSeek’s innovation, but added that “reasoning models” require more computing power, which could ultimately benefit Nvidia’s business.
The Bans & Restrictions Against DeepSeek
While DeepSeek is gaining users, it is also facing bans and restrictions worldwide.
🚫 Who Has Banned DeepSeek?
- South Korea banned DeepSeek from use in the country
- New York State banned DeepSeek on government devices
- The U.S. government is considering a full ban due to concerns over foreign influence
Washington sees DeepSeek as a potential national security risk, and restrictions on government use of Chinese AI models are likely to expand.
What’s Next for DeepSeek AI?
DeepSeek is growing fast, but its future remains uncertain.
✅ DeepSeek’s Strengths:
- Highly competitive AI models
- Huge developer adoption
- Backing from major investors
❌ DeepSeek’s Challenges:
- Lack of a clear business model
- Regulatory restrictions in multiple countries
- Reliance on Nvidia’s downgraded chips due to U.S. bans
One thing is certain: DeepSeek isn’t going away anytime soon. As AI becomes more global, expect to see more competition from China-backed AI startups.
What do you think? Is DeepSeek AI a true threat to OpenAI, or is it overhyped? Drop your thoughts in the comments! 🚀
