DeepSeek has become a global phenomenon almost overnight, catapulting the previously little-known Chinese AI lab into prominence after its chatbot surged to the top of both Apple’s App Store and Google Play rankings. The app’s rapid success has provoked widespread attention among technologists and financial analysts alike, fueling conversations about whether the United States can retain its competitive edge in the global artificial intelligence sector, and raising concerns about the sustainability of the current AI hardware market.
Emerging from the trading world, DeepSeek traces its roots back to High-Flyer Capital Management, a China-based quantitative hedge fund founded by Liang Wenfeng in 2015. Liang, who started trading as an undergraduate at Zhejiang University, turned High-Flyer into an AI-focused investment firm before launching a separate research entity, DeepSeek, in 2023. This lab was initially created to explore independent developments in AI outside of their existing finance-driven focus.
From the outset, DeepSeek distinguished itself from many competitors by establishing its own data center infrastructure specifically tailored for training large-scale models. However, U.S. hardware restrictions significantly impacted the company, forcing it to rely on lower-capability Nvidia H800 chips instead of the more advanced H100 chips available to American firms. Despite these constraints, DeepSeek’s sophisticated computational methods have enabled the company to deliver highly efficient AI solutions at costs significantly lower than competitors.
Staffed largely by young AI researchers—many recruited aggressively straight out of top Chinese universities—DeepSeek also employs a diverse range of personnel, including non-technical experts brought in to help deepen the models’ understanding across various subjects.
In November 2023, DeepSeek introduced its initial set of AI products, including DeepSeek Coder, DeepSeek LLM, and DeepSeek Chat, but it was the subsequent DeepSeek-V2 series that put the company on the map by offering outstanding performance at significantly reduced computational costs. Rivals such as ByteDance and Alibaba responded by reducing their own pricing structures and, in some cases, offering previously premium AI services entirely free.
Late in 2024, DeepSeek further impressed observers with the release of DeepSeek-V3. Benchmarked internally by the company, DeepSeek-V3 reportedly outperformed leading open-source models like Meta’s Llama, as well as premium models such as OpenAI’s GPT-4o. Also noteworthy was their newer R1 “reasoning” model, launched in January 2025. DeepSeek R1 showcases advanced self-checking capabilities, helping it avoid common errors made by traditional AI systems. Although reasoning models typically take slightly longer to deliver results, their significantly improved accuracy on complex tasks like math, physics, and scientific reasoning has drawn considerable attention.
Even with its impressive technological advancements, DeepSeek’s offerings come with limitations specific to its home market. As required by China’s regulators, DeepSeek models embed built-in content restrictions to align with official stances, refusing to discuss sensitive topics such as Taiwan’s status or Tiananmen Square.
This rapid rise to popularity propelled global interest—as of March 2025, DeepSeek had reached 16.5 million monthly website visits, placing second only to industry giant ChatGPT, which recorded over 500 million weekly users. Subsequently, in May 2025, DeepSeek released an updated variant of their R1 reasoning model, making it openly accessible on developer-focused platform Hugging Face.
DeepSeek’s disruptive business approach is unconventional. Unlike many startups, the company avoids external venture capital investment and offers many products at steeply discounted prices or even free of charge. Its claimed cost effectiveness has sparked skepticism among some industry observers but has nonetheless enabled major developer adoption. Over 500 derivative models based on DeepSeek’s R1 model appeared quickly on Hugging Face, collectively seeing millions of downloads.
DeepSeek’s accelerated rise has shaken established industry players. It notably contributed to an 18 percent market plunge for Nvidia in early 2025, prompted OpenAI CEO Sam Altman to publicly address the matter, and triggered various corporate and national bans, most notably within South Korea and several U.S. government agencies. Microsoft has integrated DeepSeek within certain Azure services, even as company executives confirmed DeepSeek usage is barred internally due to security considerations. Other prominent technology executives, including Meta’s Mark Zuckerberg and Nvidia’s Jensen Huang, publicly commented on DeepSeek’s disruptive market presence, reinforcing the broader industry conversation about competition and geopolitical influences in AI innovation.
As DeepSeek forges ahead, its position remains uncertain against the backdrop of increasing scrutiny from Western governments wary of perceived threats from foreign-developed AI technologies. With improved iterations of its already powerful AI models almost certainly underway, DeepSeek’s impact on the global technology landscape—and on geopolitical technological competition—will remain closely watched in months and years to come.
