DeepSeek, the Chinese AI company challenging US tech giants with affordable, open-source AI models, is reshaping the future of AI. Learn more about its innovations.
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| DeepSeek’s innovative approach to AI is disrupting the industry with low-cost, high-performance models that challenge US giants like OpenAI. Image: ChicHue |
Tech Desk — February 1, 2025:
DeepSeek, a Chinese AI company, is rapidly reshaping the global artificial intelligence landscape. Founded in 2023 by Liang Wenfeng, DeepSeek’s innovative open-source large language models (LLMs) have made a major impact, challenging the dominance of established US tech giants like OpenAI, Nvidia, and Microsoft. With its groundbreaking R1 reasoning model launched in January 2025, DeepSeek is setting new standards for cost efficiency, advanced AI capabilities, and open-access technology.
In this post, we’ll explore how DeepSeek is revolutionizing the AI industry, answering key questions about the company’s low-cost approach, its technology, and how it compares to competitors like ChatGPT.
What is DeepSeek and What Does It Do?
DeepSeek is an AI development firm based in Hangzhou, China. It was co-founded by Liang Wenfeng, a Zhejiang University graduate, and is owned by the China-based hedge fund High-Flyer. The company specializes in developing open-source large language models (LLMs) and artificial general intelligence (AGI) research. DeepSeek's models are designed to tackle a variety of tasks, from text generation and coding challenges to advanced reasoning tasks. The company aims to build AI systems capable of general intelligence, and its rapid progress has disrupted the industry.
How is DeepSeek So Cheap?
DeepSeek’s impressive cost-efficiency is one of its most disruptive features. While other companies like OpenAI and Nvidia have spent billions of dollars developing AI models, DeepSeek has created its R1 model for less than $6 million. This low cost is primarily due to the company’s unique approach to AI development. DeepSeek uses fewer AI accelerators (such as GPUs) and employs more efficient training techniques, like reinforcement learning and knowledge distillation. These methods significantly reduce the computational resources required for model training, enabling DeepSeek to deliver high-performance AI at a fraction of the cost of its competitors.
Why is DeepSeek Better Than ChatGPT?
There are several reasons why DeepSeek’s R1 model is considered better than OpenAI’s ChatGPT for certain applications:
Lower Cost: DeepSeek offers its advanced AI models for free under an open-source license, allowing developers to use them without incurring the high costs associated with proprietary models like ChatGPT.
Advanced Reasoning Capabilities: DeepSeek's R1 model is specifically designed for advanced reasoning tasks, making it a powerful tool for complex problem-solving. While ChatGPT excels at conversational tasks, DeepSeek focuses on tasks that require more intricate logical reasoning.
Innovative Training Methods: DeepSeek’s reinforcement learning approach, combined with efficient knowledge distillation, helps create high-performing models without the need for extensive training time or massive computational infrastructure.
Open Source Advantage: Unlike ChatGPT, which operates on a subscription model, DeepSeek’s open-source approach democratizes access to AI tools, empowering developers to adapt and innovate without paying expensive licensing fees.
How Does DeepSeek Work?
DeepSeek’s approach to AI development is grounded in a mix of innovative techniques aimed at reducing costs while maximizing performance. The company uses reinforcement learning to improve its models' reasoning capabilities. By focusing on training the models for complex reasoning tasks, DeepSeek has built a competitive edge over other companies focusing primarily on conversational AI.
Additionally, DeepSeek employs knowledge distillation, which allows the company to compress large models into smaller, more efficient versions without sacrificing performance. This has helped the company create powerful AI models like the R1 model, which has 671 billion parameters and a context length of 128,000 tokens, all while keeping costs low.
What Makes DeepSeek Stand Out?
Several factors make DeepSeek stand out in the AI industry:
Cost-Efficiency: DeepSeek’s models, such as the R1, have been developed for a fraction of the cost of their US counterparts, which makes them highly attractive for businesses looking to cut costs while still leveraging advanced AI technology.
Open-Source Technology: By offering its models for free under an open-source license, DeepSeek is challenging the proprietary business model of US firms like OpenAI, which charges monthly fees for access to its services.
Geopolitical Impact: DeepSeek’s rise represents a challenge to the technological dominance of the US in AI. The company’s success is being compared to the Soviet Union’s Sputnik moment, marking a shift in the global balance of power in AI development.
What Company Owns DeepSeek?
DeepSeek is owned by High-Flyer, a China-based quantitative hedge fund. High-Flyer co-founded the company, and its AI lab quickly evolved into an independent entity in 2023. Liang Wenfeng, a co-founder of High-Flyer, also serves as the CEO of DeepSeek, driving the company’s vision to advance AI research and create open-source AI tools.
How Did DeepSeek Achieve Its Success?
DeepSeek’s rapid success is the result of a combination of strategic decisions and innovative technological advancements:
Efficient Use of Resources: DeepSeek has been able to build competitive AI models with fewer resources and at a lower cost than many of its US competitors.
Focus on Reasoning: By focusing on developing models for advanced reasoning tasks, DeepSeek has created AI that performs well in complex problem-solving scenarios, setting it apart from conversational AI models like ChatGPT.
Open-Source Model: DeepSeek’s decision to release its models under an open-source license has given it a significant advantage over competitors like OpenAI, making its technology more accessible and fostering innovation in the AI community.
Geopolitical Shift: DeepSeek’s success also signals a shift in the global AI landscape, challenging the technological dominance of the US and raising concerns about China’s growing influence in the field of AI.
Why DeepSeek Is Better Than ChatGPT
DeepSeek is redefining what is possible in AI by combining cost-effectiveness, advanced reasoning capabilities, and an open-source business model. Compared to ChatGPT, DeepSeek’s R1 model offers a more affordable and efficient solution for businesses and developers seeking powerful AI without the heavy price tag. The company’s innovative approach to training and development, paired with its focus on reasoning tasks, makes it a formidable competitor in the AI market.
DeepSeek’s rise marks a pivotal moment in the AI industry, disrupting the status quo of US tech giants. With its low-cost, high-performance models and open-source approach, DeepSeek is setting new standards for AI development. As the company continues to innovate and expand its capabilities, its impact on the global AI landscape will only grow. For developers and businesses looking for affordable, cutting-edge AI tools, DeepSeek represents a revolutionary shift in the world of artificial intelligence.
By providing access to powerful models like the R1 and fostering an open-source community, DeepSeek is helping to democratize AI, ensuring that the future of artificial intelligence is more accessible, efficient, and innovative than ever before.