WORLD
How Liang Wenfeng and his China-made AI model DeepSeek are shaking the world
- IBJ Bureau
- Jan 29, 2025
A Chinese-made artificial intelligence (AI) model called DeepSeek has shot to the top of Apple Store’s downloads, stunning investors and sinking some tech stocks.
Its latest version was released on January 20, quickly impressing AI experts before it got the attention of the entire tech industry and the world.
US President Donald Trump said it was a “wake-up call” for US companies who must focus on “competing to win”.
What makes DeepSeek so special is the company’s claim that it was built at a fraction of the cost of industry-leading models like OpenAI because it uses fewer advanced chips.
DeepSeek also raises questions about Washington’s efforts to contain Beijing’s push for tech supremacy, given that one of its key restrictions has been a ban on the export of advanced chips to China.
Beijing, however, has doubled down, with President Xi Jinping declaring AI a top priority. And start-ups like DeepSeek are crucial as China pivots from traditional manufacturing such as clothes and furniture to advanced tech – chips, electric vehicles (EVs) and AI.
DeepSeek is the name of a free AI-powered chatbot, which looks, feels and works very much like ChatGPT.
That means it is used for many of the same tasks, though exactly how well it works compared to its rivals is up for debate.
It is reportedly as powerful as OpenAI’s o1 model – released at the end of last year – in tasks, including mathematics and coding.
Like o1, R1 is a “reasoning” model. These models produce responses incrementally, simulating a process similar to how humans reason through problems or ideas. It uses less memory than its rivals, ultimately reducing the cost to perform tasks.
DeepSeek’s founder reportedly built up a store of Nvidia A100 chips, which have been banned from export to China since September 2022.
Some experts believe this collection – which some estimates put at 50,000 – led him to build such a powerful AI model, by pairing these chips with cheaper, less sophisticated ones.
DeepSeek was founded in December 2023 by Liang Wenfeng, and it released its first AI large language model the following year.
Not much is known about Mr Wenfeng, who graduated from Zhejiang University with degrees in electronic information engineering and computer science. But he now finds himself in the international spotlight.
Unlike many American AI entrepreneurs who are from Silicon Valley, Mr Liang also has a background in finance.
He is the CEO of a hedge fund called High-Flyer, which uses AI to analyse financial data to make investment decisions – what is called quantitative trading. In 2019, High-Flyer became the first quant hedge fund in China to raise over $13 million.
Explaining the reason for DeepSeek’s model surprising so many in Silicon Valley, Mr Wenfeng recently said: “Their surprise stems from seeing a Chinese company join their game as an innovator, not just a follower – which is what most Chinese firms are accustomed to.”
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