DeepSeek

Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd., doing business as DeepSeek, is a Chinese artificial intelligence (AI) company that develops open weights large language models (LLMs). Based in Hangzhou, Zhejiang, DeepSeek is owned and funded by High-Flyer, a Chinese hedge fund. DeepSeek was founded in July 2023 by Liang Wenfeng, who serves as the CEO for both of the companies. The company launched an eponymous chatbot alongside its DeepSeek-R1 model in January 2025.

DeepSeek-R1 provided responses comparable to other contemporary LLMs, such as OpenAI's GPT-4 and o1. Its training cost was reported to be lower than other LLMs. The company claims that it trained V3 for US$6 million, which was less than OpenAI's reported US$100 million cost for GPT-4 in 2023. DeepSeek also claimed that they were using approximately one-tenth the computing power consumed by Meta's comparable model, Llama 3.1. DeepSeek's success against larger and more established rivals has been described as "upending AI".

DeepSeek's models are open-weight, meaning that the exact parameters are openly shared, but the training data is not openly licensed. Since the January 2025 debut of DeepSeek-R1, the company has made its new models available under free and open-source software licenses, like the MIT License. The company reportedly recruits AI researchers from top Chinese universities and hires from outside traditional computer science fields to broaden its models' knowledge and capabilities. DeepSeek is considered more closely linked to the defense industry of China, due to previous affiliations of its researchers, and its chatbot's non-combat role adoption by the People's Liberation Army since March 2025.

R1 was geopolitically significant as a open-weight, cost-effective, and high-performing release. The company also trained its models during ongoing US semiconductor trade restrictions on China, using a fewer number of weaker export model chips via a mixture of experts approach. Observers like the New York Post and The Guardian described R1 as a Sputnik moment in threatening the proprietary-led US AI ecosystem, including Nvidia, which lost US$600 billion in market value, the largest single-company decline in US stock market history.

History

Pre-founding years

In June 2015, High-Flyer was co-founded by AI enthusiast Liang Wenfeng, who had been trading since the 2008 financial crisis while attending Zhejiang University. The company began stock trading using a GPU-dependent deep learning model on 21 October 2016. Previously, it had used CPU-based linear models. By the end of 2017, most of its trading was driven by AI.

Fire-flyer

In 2019, the company began constructing its first computing cluster, Fire-Flyer, at a cost of 200 million yuan. The computing cluster contained 1,100 GPUs interconnected at 200 Gbit/s and was retired after 1.5 years in operation. By 2021, Liang had started buying large quantities of Nvidia GPUs for an AI project, reportedly obtaining 10,000 Nvidia A100 GPUs before the United States restricted chip sales to China.

Fire-flyer 2

Computing cluster Fire-Flyer 2 began construction in 2021 with a budget of 1 billion yuan. It was reported that in 2022, Fire-Flyer 2's capacity had been used at over 96%, totaling 56.74 million GPU hours. 27% of Fire-Flyer 2's capacity was used to support scientific computing outside the company. Fire-Flyer 2 had 5,000 PCIe A100 GPUs in 625 nodes, each containing 8 GPUs. At the time, it exclusively used PCIe instead of the DGX version of A100. This was because the models it trained could fit within a single 40 GB GPU VRAM. Hence, there was no need for the higher bandwidth of DGX at the time (it required only data parallelism but not model parallelism). Later, it incorporated both NVLinks and Nvidia Collective Communications Library (NCCL) to train larger models that required model parallelism.

Founding

On 14 April 2023, High-Flyer announced the launch of an artificial general intelligence (AGI) research lab, stating that the new lab would focus on developing AI tools unrelated to the firm's financial business. Two months later, on 17 July 2023, that lab was spun off into an independent company. That lab was named DeepSeek, with High-Flyer as its principal investor and backer. Initially, venture capital investors were reluctant to provide funding, as they considered it unlikely that the venture would be able to quickly generate an exit (an ownership stake in an investment).

Company operation

DeepSeek is headquartered in Hangzhou, Zhejiang, and is owned and funded by High-Flyer. Its co-founder, Liang Wenfeng, serves as CEO. As of May 2024, Liang personally held an 84% stake in DeepSeek through two shell corporations. In February 2026, Anthropic accused DeepSeek of using thousands of fraudulent accounts to generate millions of conversations with Claude to train its own LLMs. In April 2026, investors began speaking with DeepSeek for a $300 million funding round, which would bring DeepSeek to a total valuation of $10 billion. In July 2026, Bloomberg and the Financial Times reported the company had begun preparations for an IPO that would see it list as soon as 2027.

Strategy

DeepSeek has stated that it focuses on research and does not have immediate plans for commercialization. This posture also means it can skirt certain provisions of China's AI regulations aimed at consumer-facing technologies.

DeepSeek's hiring approach emphasizes skills over lengthy work experience, resulting in many hires fresh out of university. The company likewise recruits individuals without computer science backgrounds to expand the range of expertise incorporated into the models, for instance in poetry or advanced mathematics. According to The New York Times, dozens of DeepSeek researchers have or have previously had affiliations with People's Liberation Army laboratories and the Seven Sons of National Defence. Since 2025, its chatbot was adopted in non-combat roles by the People's Liberation Army, including hospitals, the People's Armed Police paramilitary, and national mobilization organizations.

Due to U.S. chip restrictions, DeepSeek has continuously refined its algorithms to maximize computational efficiency, leveraging older hardware and reducing energy consumption.

DeepSeek also expanded on the African continent as it offers more affordable and less power-hungry AI solutions. The company has bolstered African language models and generated a number of startups, for example in Nairobi. Along with Huawei's storage and cloud computing services, the impact on the tech scene in sub-Saharan Africa is considerable. DeepSeek offers local data sovereignty and more flexibility compared to Western AI platforms.

Training framework…