DeepSeek The Chinese AI Startup Changing the AI Industry

A new Chinese company, DeepSeek, is making big waves in the world of artificial intelligence (AI). With its latest AI models, DeepSeek-V3 and DeepSeek-R1, the company is competing with top players like OpenAI and Meta. What makes it different? It offers high-quality AI at a much lower cost. Let’s take a closer look at why it is gaining so much attention and how it could change the AI industry.

Why Is DeepSeek Making News

DeepSeek has surprised many by building AI models as powerful as leading U.S. models but at a much lower cost. The company says it trained its DeepSeek-V3 model using less than $6 million in computing power, while other AI giants spend billions.

Its AI assistant has become incredibly popular, even beating ChatGPT to become the top free app on Apple’s App Store in the United States. This success has raised questions about why U.S. tech companies are spending so much on AI development.

Low Cost Big Advantage

One of the biggest reasons it is getting attention is because it is much cheaper to use. The DeepSeek-R1 model, launched recently, is said to be 20 to 50 times cheaper than OpenAI’s models, depending on the task.

Since AI is used in many industries, having affordable, high-quality AI could make a huge difference for businesses worldwide.

Questions and Doubts

Even though DeepSeek is doing well, some people are questioning its claims. Analysts from a research company called Bernstein believe the cost of training the models might actually be higher than the company has stated.

There are also concerns about the access to advanced AI chips. Scale AI CEO Alexandr Wang suggested that it might be using 50,000 Nvidia H100 chips, which would violate U.S. export restrictions on which they did not respond to these claims.

Who Owns DeepSeek

DeepSeek is based in Hangzhou, China, and is owned by Liang Wenfeng, who also co-founded a hedge fund called High-Flyer. In 2023, High-Flyer announced that it would focus on AI research, leading to the creation of this application.

High-Flyer is believed to have played a key role in supporting it, with reports showing that it owns AI chip patents and operated a cluster of 10,000 Nvidia A100 chips in 2022. While the exact funding details of this application are unclear, it is evident that the company has strong backing.

How Is the Chinese Government Reacting

The success has attracted attention from China’s government. On January 20, 2025, the day DeepSeek-R1 was launched, the company’s owner, Liang Wenfeng, attended a private meeting with China’s Premier, Li Qiang.

This suggests that it may play a key role in China’s long-term goal of reducing its reliance on U.S. technology and becoming a leader in AI.

What’s Next for DeepSeek

This AI powered application is growing fast and challenging big tech companies. With support from the Chinese government and a focus on making AI more affordable, it could become a major player in the AI world. However, there are still questions about its transparency, funding, and potential conflicts with global regulations.

As AI continues to evolve, its low-cost, high-performance models could change the way companies use AI. Whether it will maintain its rapid growth remains to be seen, but one thing is clear—it is already making a big impact. For more information about AI app development services, contact us now.