I.T. News – January 28, 2025

1 – How Chinese AI Startup DeepSeek Made a Model that Rivals OpenAI

Zeyi Yang. Wired. Jan 25, 2025.

When Chinese quant hedge fund founder Liang Wenfeng went into AI research, he took 10,000 Nvidia chips and assembled a team of young, ambitious talent. Two years later, DeepSeek exploded on the scene.

On January 20, DeepSeek, a relatively unknown AI research lab from China, released an open source model that’s quickly become the talk of the town in Silicon Valley. According to a paper authored by the company, DeepSeek-R1 beats the industry’s leading models like OpenAI o1 on several math and reasoning benchmarks. In fact, on many metrics that matter—capability, cost, openness—DeepSeek is giving Western AI giants a run for their money.

DeepSeek’s success points to an unintended outcome of the tech cold war between the US and China. US export controls have severely curtailed the ability of Chinese tech firms to compete on AI in the Western way—that is, infinitely scaling up by buying more chips and training for a longer period of time. As a result, most Chinese companies have focused on downstream applications rather than building their own models. But with its latest release, DeepSeek proves that there’s another way to win: by revamping the foundational structure of AI models and using limited resources more efficiently.

“Unlike many Chinese AI firms that rely heavily on access to advanced hardware, DeepSeek has focused on maximizing software-driven resource optimization,” explains Marina Zhang, an associate professor at the University of Technology Sydney, who studies Chinese innovations. “DeepSeek has embraced open source methods, pooling collective expertise and fostering collaborative innovation. This approach not only mitigates resource constraints but also accelerates the development of cutting-edge technologies, setting DeepSeek apart from more insular competitors.”

A Star Hedge Fund in China

Even within the Chinese AI industry, DeepSeek is an unconventional player. It started as Fire-Flyer, a deep-learning research branch of High-Flyer, one of China’s best-performing quantitative hedge funds. Founded in 2015, the hedge fund quickly rose to prominence in China, becoming the first quant hedge fund to raise over 100 billion RMB (around $15 billion). (Since 2021, the number has dipped to around $8 billion, though High-Flyer remains one of the most important quant hedge funds in the country.)

For years, High-Flyer had been stockpiling GPUs and building Fire-Flyer supercomputers to analyze financial data. Then, in 2023, Liang, who has a master's degree in computer science, decided to pour the fund’s resources into a new company called DeepSeek that would build its own cutting-edge models—and hopefully develop artificial general intelligence. It was as if Jane Street had decided to become an AI startup and burn its cash on scientific research.

Bold vision. But somehow, it worked. “DeepSeek represents a new generation of Chinese tech companies that prioritize long-term technological advancement over quick commercialization,” says Zhang.

Liang told the Chinese tech publication 36Kr that the decision was driven by scientific curiosity rather than a desire to turn a profit. “I wouldn’t be able to find a commercial reason [for founding DeepSeek] even if you ask me to,” he explained. “Because it’s not worth it commercially. Basic science research has a very low return-on-investment ratio. When OpenAI’s early investors gave it money, they sure weren’t thinking about how much return they would get. Rather, it was that they really wanted to do this thing.”

Today, DeepSeek is one of the only leading AI firms in China that doesn’t rely on funding from tech giants like Baidu, Alibaba, or ByteDance.

A Young Group of Geniuses Eager to Prove Themselves

According to Liang, when he put together DeepSeek’s research team, he was not looking for experienced engineers to build a consumer-facing product.

Episode 3952 - Jan 29 - Tiếng Anh - Công nghệ Thông tin – Ngày 28 tháng 1, 2025 - Vina Technology at AI time

Vina Technology at AI time - Công nghệ Việt Nam thời AI

Episode 3952 - Jan 29 - Tiếng Anh - Công nghệ Thông tin – Ngày 28 tháng 1, 2025 - Vina Technology at AI time