In a world dominated by billion-dollar tech companies, a small Chinese startup is making big waves. DeepSeek, founded in 2023 by AI expert Liang Wenfeng, is showing that you don’t need a massive budget to make a huge impact. By building powerful, open-source AI models for just $6 million—a fraction of what Western companies spend—DeepSeek is rewriting the rules of artificial intelligence.
The Story Behind DeepSeek
Liang Wenfeng, once a trader using AI-driven algorithms, co-founded the hedge fund High-Flyer in 2016. He used that experience to start DeepSeek in 2023 (Bloomberg, 2025). Despite skepticism from investors, Wenfeng had a clear vision: create cutting-edge AI technology that challenges industry giants.
How DeepSeek Built Powerful AI on a Tight Budget
DeepSeek’s first big success was the DeepSeek-R1 model, which performed as well as OpenAI’s GPT-4o and Meta’s LLaMA 3.1, but cost just $6 million to train compared to GPT-4’s $100 million (Nature, 2025). The secret? Smart use of reinforcement learning techniques and efficient hardware like Nvidia’s A100 GPUs (Financial Times, 2025).
In May 2024, DeepSeek released its V2 model, which offered great performance at a low price. This sparked a price war among big Chinese tech companies like ByteDance, Tencent, Baidu, and Alibaba (The Verge, 2025). Unlike many rivals, DeepSeek remained profitable while keeping prices low.
DeepSeek’s Impact on Global Markets
DeepSeek’s rise didn’t just shake up Chinese tech. It caused major ripples worldwide. When DeepSeek’s chatbot app became the most downloaded free app in the U.S. iOS App Store, beating ChatGPT, Nvidia’s stock dropped by 18% (Wall Street Journal, 2025). The affordability of DeepSeek’s models made investors question whether big spending on AI was still necessary (Business Insider, 2025).
Thriving Despite Global Tensions
DeepSeek’s success came during a time of growing tensions between the U.S. and China. American sanctions tried to limit China’s access to advanced AI chips, but instead pushed companies like DeepSeek to innovate with fewer resources (MIT Technology Review, 2025).
However, DeepSeek’s ties to Chinese government censorship and data collection practices raised red flags. In early 2024, Australia banned DeepSeek technology from government devices due to privacy concerns (The Guardian, 2025). While DeepSeek’s open-source models promote innovation, they also risk being misused, leading to increased scrutiny in many countries (Forbes, 2025).
The Risks and Rewards of Open-Source AI
DeepSeek’s decision to make its AI models open-source has helped it grow fast. By sharing its technology, DeepSeek has built a global community that accelerates AI development. But this openness comes with risks. Some reports suggest DeepSeek’s models are more prone to generating harmful or censored content, especially on sensitive topics like Tiananmen Square or Taiwan (The Telegraph, 2025).
Final Thoughts
DeepSeek has shown that you don’t need a huge budget to create world-class AI. By building high-performance models at a fraction of the cost, it has set a new standard for efficiency and innovation. But as the company grows, it faces the challenge of balancing rapid development with ethical responsibility. The global tech industry will be watching closely to see how DeepSeek’s story unfolds.
References
Bloomberg. (2025). Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd. Retrieved from https://www.bloomberg.com/profile/company/2544189D:CH
Business Insider. (2025). DeepSeek’s cheaper models and weaker chips call into question trillions in AI infrastructure spending. Retrieved from https://www.businessinsider.com/explaining-deepseek-chinese-models-efficiency-scaring-markets-2025-1
Financial Times. (2025). How DeepSeek’s cost-effective AI models are rewriting tech economics. Retrieved from https://www.ft.com/content/ea803121-196f-4c61-ab70-93b38043836e
Forbes. (2025). ChatGPT, DeepSeek, Or Llama? Meta’s LeCun Says Open-Source Is The Key. Retrieved from https://www.forbes.com/sites/luisromero/2025/01/27/chatgpt-deepseek-or-llama-metas-lecun-says-open-source-is-the-key/
MIT Technology Review. (2025). How a top Chinese AI model overcame US sanctions. Retrieved from https://www.technologyreview.com/2025/01/24/1110526/china-deepseek-top-ai-despite-sanctions/
Nature. (2025). China’s cheap, open AI model DeepSeek thrills scientists. Retrieved from https://www.nature.com/articles/d41586-025-00229-6
The Guardian. (2025). We tried out DeepSeek. It worked well, until we asked it about Tiananmen Square and Taiwan. Retrieved from https://www.theguardian.com/technology/2025/jan/28/we-tried-out-deepseek-it-works-well-until-we-asked-it-about-tiananmen-square-and-taiwan
The Telegraph. (2025). Chinese AI has sparked a $1 trillion panic – and it doesn’t care about free speech. Retrieved from https://www.telegraph.co.uk/business/2025/01/27/Bd-deepseek-ai-has-sparked-a-1-trillion-panic/
The Verge. (2025). DeepSeek’s influence on the global AI price war. Retrieved from https://www.theverge.com/ai-artificial-intelligence/598846/deepseek-big-tech-ai-industry-nvidia-impac
Wall Street Journal. (2025). DeepSeek’s rise causes Nvidia’s stock to tumble. Retrieved from https://www.wsj.com/tech/ai/china-deepseek-ai-dangerous-information-e8eb31a8