DeepSeek: Everything you need to know about the AI chatbot app

 

DeepSeek's Meteoric Rise

Chinese AI lab DeepSeek has surged into the global spotlight, propelled by the rapid success of its chatbot app, which recently topped the charts on both the Apple App Store and Google Play. With AI models trained using compute-efficient techniques, DeepSeek has sparked concerns among Wall Street analysts and technologists about the U.S.'s ability to maintain its lead in the AI race and the future demand for AI chips.

The Origins of DeepSeek

DeepSeek traces its roots to High-Flyer Capital Management, a Chinese quantitative hedge fund leveraging AI for trading decisions. High-Flyer was co-founded by AI enthusiast Liang Wenfeng, who started experimenting with trading during his time at Zhejiang University. In 2019, he officially launched the hedge fund with a focus on developing and implementing AI algorithms.

By 2023, High-Flyer established DeepSeek as a separate AI research lab. With initial funding from High-Flyer, DeepSeek eventually spun off into an independent company while maintaining a focus on building advanced AI systems. Despite U.S. export bans on advanced hardware, DeepSeek has continued its development using Nvidia H800 chips—a less powerful alternative to the H100 available to U.S. companies.

DeepSeek's Powerful AI Models

In November 2023, DeepSeek introduced its first suite of models: DeepSeek Coder, DeepSeek LLM, and DeepSeek Chat. However, it was the release of the DeepSeek-V2 model family the following spring that cemented the company's reputation. This advanced, general-purpose system demonstrated exceptional performance across industry benchmarks while maintaining lower operational costs than comparable models. This competitive edge pressured domestic rivals like ByteDance and Alibaba to reduce model usage prices and offer some models for free.

DeepSeek's momentum continued with the launch of DeepSeek-V3 in December 2024. Internal benchmarks indicated that DeepSeek V3 outperformed both open models like Meta's Llama and proprietary models like OpenAI's GPT-4o.

The company also made waves with the release of its R1 "reasoning" model in January 2025. DeepSeek claims that R1 rivals OpenAI's o1 model on key benchmarks. R1's ability to self-check its responses enhances reliability in areas such as science, physics, and mathematics. However, reasoning models typically require more processing time to arrive at solutions.

Despite these technical achievements, DeepSeek's models are subject to censorship by Chinese regulators, ensuring their responses align with "core socialist values." For instance, DeepSeek's chatbot will not address sensitive topics like Tiananmen Square or Taiwan's independence.

A Disruptive Business Model

DeepSeek's business strategy remains ambiguous. The company offers products and services at significantly lower costs than competitors and provides some tools for free. DeepSeek attributes its price advantage to efficiency breakthroughs, although some experts question the validity of these claims.

Developers have embraced DeepSeek's models, which are available under permissive licenses for commercial use. On Hugging Face, a popular AI platform, developers have produced over 500 derivative models of R1, accumulating 2.5 million downloads.

DeepSeek's rapid ascent has unsettled the AI landscape. Its influence contributed to an 18% drop in Nvidia's stock price in January and prompted public comments from OpenAI CEO Sam Altman. Microsoft has since integrated DeepSeek models into its Azure AI Foundry platform, while Meta CEO Mark Zuckerberg emphasized ongoing AI infrastructure investments in response to DeepSeek's competitive pressure.

Despite praise from Nvidia CEO Jensen Huang for DeepSeek's innovation, concerns about national security have led to bans on DeepSeek's technology in certain regions. South Korea and New York state, for example, have prohibited its use on government devices.

The Road Ahead for DeepSeek

DeepSeek's future remains uncertain amid growing scrutiny from the U.S. government. While continued advancements in AI models are expected, geopolitical tensions and regulatory barriers could shape the company's trajectory in the coming years.