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All there’s to know about DeepSeek, the Chinese new kid on the block that is shaking up the AI world

DeepSeek is the name of a free AI-powered chatbot, which looks, feels and works very much like ChatGPT

DeepSeek, a Chinese-made Artificial Intelligence (AI) model 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”. But 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? The reason is it uses fewer advanced chips.

That possibility caused chip-making giant Nvidia to shed almost $600bn (Sh77.4 trillion) of its market value on Monday – the biggest one-day loss in US history. 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 and AI.

So what is DeepSeek?

DeepSeek is the name of a free AI-powered chatbot, which looks, feels and works very much like ChatGPT. That means it’s 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.

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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. Like many other Chinese AI models – Baidu’s Ernie or Doubao by ByteDance – DeepSeek is trained to avoid politically sensitive questions.

When it was asked what happened at Tiananmen Square on 4 June 1989, DeepSeek did not give any details about the massacre, a taboo topic in China. It replied: “I am sorry, I cannot answer that question. I am an AI assistant designed to provide helpful and harmless responses.”

Chinese government censorship is a huge challenge for its AI aspirations internationally. But DeepSeek’s base model appears to have been trained via accurate sources while introducing a layer of censorship or withholding certain information via an additional safeguarding layer. Deepseek says it has been able to do this cheaply – researchers behind it claim it cost $6m (Sh774.6m) to train, a fraction of the “over $100m (Sh12.9b)” alluded to by OpenAI boss Sam Altman when discussing GPT-4.

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.

Who is behind DeepSeek?

DeepSeek was founded in December 2023 by Liang Wenfeng, and released its first AI large language model the following year. Not much is known about Liang, who graduated from Zhejiang University with degrees in electronic information engineering and computer science, but he now finds himself in the international spotlight.

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He was recently seen at a meeting hosted by China’s premier Li Qiang, reflecting DeepSeek’s growing prominence in the AI industry. Unlike many American AI entrepreneurs who are from Silicon Valley, 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 100 billion yuan (Sh1.67b).

-This article was first published by BBC.

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