Chinese startup DeepSeek has caused a stir on Wall Street with its powerful new chatbot, which was developed at a fraction of the cost compared to its competitors. The company was founded by hedge fund prodigy Liang Wenfeng, who is convinced that AI can transform the world.
Based in Hangzhou, often referred to as “China’s Silicon Valley,” DeepSeek has quickly gained attention by releasing a cutting-edge product.
In China, DeepSeek had already made waves last year, earning the nickname “Pinduoduo of AI,” in reference to a popular e-commerce app that outpaced major players like Alibaba with its lower prices.
The company has earned praise for its cost efficiency and has impressed observers in China with its apparent ability to bypass US sanctions that restrict access to the high-tech chips necessary for AI development.
AFP recently visited the company’s offices in Hangzhou and Beijing, but found them closed due to the Lunar New Year holidays.
Founded by tech and business whiz Liang Wenfeng, born in 1985, DeepSeek is a passion project for him. Liang is an engineering graduate from Zhejiang University in Hangzhou, where he became convinced that AI would change the world.
After years of exploring how to apply AI to various fields, he found success with High-Flyer, a quantitative investment firm that used AI to analyze stock market trends. The firm went on to manage billions of yuan in assets, establishing itself as one of China’s top quantitative hedge funds.
“We just do things according to our own pace, then calculate costs and prices,” Liang explained. “Our principle is to not subsidize or make a huge profit.”
For Liang, DeepSeek was always a personal venture. In 2021, he started purchasing Nvidia graphic processing units for a side project, which later became the foundation for the firm. Those close to him describe him as “more of a geek than a boss,” with a “terrifying ability to learn.”
Liang’s project has not only surprised industry experts but also contributed to a sharp drop in the stock price of US chipmaker Nvidia. His work has also earned him a spot in the corridors of power. Last week, he was among a group of business leaders who met with Premier Li Qiang to discuss China’s economic agenda for the year.
DeepSeek’s success has raised questions about the massive investments made by tech giants in developing advanced generative AI, as well as the impact of Western sanctions on Chinese firms.
US President Donald Trump called it a “wake-up call” for Silicon Valley, while tech investor Marc Andreessen called it “AI’s Sputnik moment.” It has also sparked calls for Washington to intensify restrictions on Chinese access to advanced chips.
In an interview with Waves, Liang acknowledged that the biggest challenge they faced was US sanctions, particularly the restrictions on high-end chips. “Money has never been the problem we face; it’s the embargo on high-end chips,” he said.
Beyond the geopolitics, Liang hopes that his work with AI can help us better understand the human mind. “We hypothesize that the essence of human intelligence might be language, and human thought could essentially be a linguistic process,” he explained. “What you think of as ‘thinking’ might actually be your brain weaving language.”
