Deepseek Artificial Intelligence (AI) Chinese Company Develops Chatbots and Large language Models (LLMs)

By
Martins Chima
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DeepSeek Artificial Intelligence (AI) was first founded in July 2023 but DeepSeek’s R1 model was launched in January 2025. it is new artificial intelligence breakthrough from China is shaking up the tech world and making waves in financial circles. The system, known as DeepSeek R1, has quickly gained attention for its surprising efficiency and strength.

The model comes from DeepSeek artificial intelligence, a young startup founded just last year, which has already achieved what some in Silicon Valley describe as a historic leap forward. Venture capitalist Marc Andreessen even compared the launch to a modern “Sputnik moment” for AI. Remarkably, R1 delivers performance close to that of well-known giants like OpenAI’s GPT-4, Meta’s Llama, and Google’s Gemini—but at a fraction of their operating costs.

DeepSeek revealed that developing its core model required only $5.6 million, a figure dwarfed by the hundreds of millions or even billions invested by U.S. tech leaders in comparable systems. What makes this achievement even more notable is the ongoing effort by Washington to block China’s access to advanced AI chips for security reasons. Despite those restrictions, DeepSeek appears to have reached its milestone using far less powerful hardware than its American counterparts.

What is this DeepSeek AI and Why is this Chinese AI startup that is Trending?

DeepSeek is a Chinese artificial intelligence company that focuses on building large language models (LLMs) and conversational AI systems, often called chatbots. It was established in July 2023 by Liang Wenfeng, who is also known for co-founding the High-Flyer hedge fund.

Key aspects of DeepSeek:

  • Large Language Models (LLMs): The company specializes in creating advanced AI models, including the DeepSeek-R1 model known for its reasoning abilities. 
  • Efficiency: DeepSeek’s models are noted for being developed at a lower cost and with less computing power than those from American competitors. 
  • Open-Source and Accessibility: The company’s AI models are open-source and have been made available on developer platforms, making them accessible to a broader audience. 
  • Founder and Funding: It was founded by Liang Wenfeng, a co-founder of High-Flyer, a Chinese hedge fund that focuses on AI-driven quantitative trading and also owns the company, according to Reuters. 
  • Partnerships: DeepSeek has partnered with other Chinese companies, such as BYD, to integrate its AI models into their technology. 
  • Global Impact: The emergence of DeepSeek artificial intelligence has drawn international attention to China’s growing AI industry and sparked discussions about global AI competition

Pros (Advantages) of Deepseek Artificial Intelligence (AI)

The key advantages of DeepSeek based on its emergence and current performance are as follows:

  1. Cost-Effective – Developed R1 at just ~$5.6M vs. billions spent by U.S. rivals.
  2. Strong Performance – Comparable results to GPT-4, Llama, and Gemini despite limited resources.
  3. Open-Source Models – Freely available on HuggingFace, encouraging global collaboration.
  4. Accessible Hardware – Works on less powerful chips, lowering entry barriers for others.
  5. Fast Adoption – App surged past ChatGPT in downloads, with nearly 2M users.
  6. Practical Integration – Already embedded in companies like BYD.
  7. Industry Disruption – Pushes U.S. tech giants to rethink spending efficiency.
  8. Global Reach – Enables emerging markets to explore AI without massive infrastructure costs.
  9. Visionary Leadership – Liang Wenfeng driving AI advocacy and investment.
  10. Geopolitical Signal – Shows innovation can thrive even under sanctions.

Cons (Challenges & Risks) of Deekseek Artificial Intelligence (AI)

The key disadvantages of DeepSeek based on its emergence and current performance are as follows:

  1. Limited Transparency – Training costs may exclude R&D and hidden expenses.
  2. Early Stage – R1 is still consumer-focused; hasn’t proven itself in heavy industrial or enterprise AI.
  3. Content Restrictions – Previous models (e.g., V3) censored politically sensitive topics, raising concerns about global competitiveness.
  4. Uncertain Longevity – One success doesn’t guarantee long-term leadership.
  5. Market Trust Issues – As a young, little-known startup, credibility is still being tested.
  6. Dependency Risks – Global adoption could increase reliance on Chinese AI infrastructure.
  7. Lack of Ecosystem Depth – U.S. still has more capital, talent pools, and infrastructure.
  8. Geopolitical Tensions – U.S.–China rivalry may limit DeepSeek’s international expansion.
  9. Scaling Challenges – Industrial-level AI requires far greater resources and partnerships.
  10. Investor Skepticism – Markets question whether low-cost models can remain profitable long-term.

DeepSeek R1: China’s Open-Source Challenger to U.S. AI Dominance

What makes DeepSeek stand out is its ability to create highly efficient AI models that can rival those from major U.S. firms like OpenAI, but with far fewer computing resources. This efficiency has attracted a lot of attention in the tech world.

Another important point is that DeepSeek follows an open-source approach. Its models are freely available on platforms such as HuggingFace, which allows researchers and developers worldwide to use and build on them. In fact, some companies—including the Chinese automaker BYD—have already integrated DeepSeek’s technology into their own products and services.

Liang Wenfeng has quickly earned the reputation of being “China’s Sam Altman,” positioning himself as both a promoter of AI technology and a driving force for investment in new research. Beyond leading DeepSeek, he is also a co-founder of the High-Flyer hedge fund, which now places strong emphasis on artificial intelligence development.

DeepSeek Competitive AI models

Much like other well-known AI startups such as Anthropic and Perplexity, DeepSeek has released several competitive AI models in the past year. Its V3 model brought the company some recognition, but also sparked debate because of its restrictions on politically sensitive content related to the Chinese government and leadership. Analysts, including those cited by The Wall Street Journal, questioned whether such limitations would weaken the company’s chances of competing globally.

The turning point came with the release of DeepSeek R1. First revealed quietly at the end of last year and officially launched just last week, R1 shocked the industry when DeepSeek disclosed that it operated at a remarkably low cost compared to Western competitors. Another major factor in its success is that R1 is open-source, allowing outside developers and companies to test, adapt, and improve upon the model.

On the consumer side, the company’s popularity has skyrocketed. The DeepSeek app quickly climbed app store rankings, even surpassing ChatGPT earlier this week. It has already been downloaded nearly two million times, signaling both widespread curiosity and strong adoption.

Why is this Deepseek Chinese AI startup that is Trending

DeepSeek is trending because it represents a major disruption in the global AI race. Some of the key reasons are:

  1. Low-Cost Breakthrough – Unlike U.S. tech giants like OpenAI, Google, and Meta that spend hundreds of millions or even billions on training their AI models, DeepSeek claims it built its flagship model R1 with just $5.6 million. This shocked the industry, especially given U.S. restrictions on exporting advanced AI chips to China.
  2. Competitive Performance – Despite its much smaller budget, R1 delivers results comparable to GPT-4, Llama, and Gemini, proving that high-level AI innovation is not limited to U.S. companies.
  3. Open-Source Advantage – DeepSeek released its models openly, meaning developers, researchers, and companies worldwide can use, test, and build on them. This has helped it gain quick traction in the global tech community.
  4. Explosive Popularity – The DeepSeek app surged on app store charts, even overtaking ChatGPT earlier this month, with nearly 2 million downloads. That level of adoption in such a short time is rare.
  5. Geopolitical Shockwaves – The success of DeepSeek artificial intelligence is being viewed as a “Sputnik moment” for AI, raising concerns on Wall Street and in Washington about China’s growing ability to challenge U.S. dominance in advanced technologies.

In short, DeepSeek is trending because it proved that China can build powerful, affordable AI models, and it’s already shaking up both the tech industry and geopolitics.

Why is DeepSeek AI a deal breaker for the Tech World?

When we talk about artificial intelligence today, one of the first challenges we must consider is scale and cost. Training advanced AI models is extraordinarily resource-intensive, demanding not only cutting-edge chips but also vast amounts of electricity. In fact, the industry has become so energy-hungry that some of America’s largest technology firms are now investing directly in nuclear power to secure reliable energy supplies for their data centers.

To give you perspective, Meta recently announced plans to spend around $65 billion in a single year on AI development. Similarly, Sam Altman, CEO of OpenAI, has suggested that the global AI sector may eventually require trillions of dollars to cover both the chips and the energy infrastructure needed to sustain the growth of these models.

This is why DeepSeek’s achievement is so striking. Here we have a Chinese startup demonstrating that models approaching the performance of U.S. heavyweights can be trained on less powerful chips and at a tiny fraction of the cost. Such a development challenges the long-standing assumption that only massive financial and energy resources can produce world-class AI.

Of course, the debate about AI isn’t limited to cost and efficiency. The technology has its skeptics and critics, many of whom worry about social disruption, concentration of power, or even existential risks. But advocates argue that AI promises to transform the global economy, boosting productivity, enabling entirely new industries, and pushing forward scientific and technological research.

The excitement around DeepSeek reflects this tension. Venture capitalist Marc Andreessen, co-founder of Andreessen Horowitz, went so far as to call the company’s breakthrough “one of the most amazing and impressive” he had ever witnessed. His reaction underscores a central point: if such transformative power can truly be achieved at lower cost, it reshapes both opportunities and risks for the world.

How DeepSeek’s rise and the U.S.–China AI rivalry affect America

Let’s step back and look at the broader picture. For years, the United States has treated artificial intelligence as a national security priority. The logic was simple: if America could maintain an edge in AI, it would reinforce both its economic dominance and its strategic power. To that end, Washington imposed strict export controls on advanced AI chips, particularly targeting China. Former President Joe Biden even tightened these restrictions in the final days of his administration, hoping to delay China’s progress by cutting off access to the hardware needed to train large models.

But here’s the surprise: DeepSeek’s emergence challenges this assumption. By building a competitive model on less advanced, restricted chips—and doing so at remarkably low cost—the startup has punctured the image of U.S. technological invulnerability. At best, the restrictions may have bought America some time, but they haven’t prevented competitors from narrowing the gap.

This has direct implications for U.S. politics as well. As President Donald Trump pursues an “America First” strategy, DeepSeek serves as a cautionary case study: blocking access to technology does not guarantee long-term dominance. Rival nations may find creative workarounds, as China’s startup ecosystem has just demonstrated.

The market reaction was swift and sharp. Wall Street opened to steep losses once the news broke. Shares of Nvidia, the world’s top supplier of AI chips, fell more than 12% in premarket trading after doubling in value for two straight years. Other major firms—Meta, Alphabet (Google’s parent company), Marvell, Broadcom, Palantir, and Oracle—also saw declines, reflecting investor fears that America’s AI edge, and by extension their profits, may be under threat.

Generally, DeepSeek illustrates a critical lesson in global technology competition: innovation can emerge under constraints, and attempts to control supply chains don’t always translate into lasting superiority.

What does Deepseek AI Launch mean for Europe, Asia and Africa?

1. Europe and Deepseek AI

  • Europe has strong research universities and AI talent, but its tech ecosystem is often overshadowed by the U.S. and China.
  • DeepSeek’s success shows that cutting-edge AI doesn’t always require trillion-dollar budgets or the most advanced chips. That lesson could embolden European startups and governments to pursue more cost-efficient AI strategies, rather than feeling perpetually behind U.S. tech giants.
  • On the flip side, Europe remains highly dependent on U.S. chip and cloud providers, which could make it vulnerable if the AI “chip wars” tighten supply chains.

2. Asia (beyond China)

  • Countries like India, Singapore, South Korea, and Japan have growing AI sectors but often face challenges in competing with U.S. and Chinese giants.
  • DeepSeek’s model suggests a new path: low-cost, open-source AI that regional players can adopt and adapt to local languages and needs.
  • For Southeast Asia and South Asia, this could accelerate AI integration into finance, healthcare, agriculture, and education without requiring U.S.-level investment.
  • However, it also intensifies geopolitical pressure, as many Asian nations balance between U.S. partnerships and China’s expanding tech influence.

3. Africa and Deepseek AI

  • Africa historically lags in access to advanced computing infrastructure, but open-source models like DeepSeek’s lower the barrier to entry.
  • With models that run on less powerful chips, African universities, startups, and governments could leverage AI without needing billion-dollar investments.
  • This could be transformative for agriculture, healthcare, mobile banking, and education, areas where Africa is already innovating with limited resources.
  • The risk is dependency: if Africa leans too heavily on Chinese AI ecosystems, it might replicate the same dependency problem it currently faces with Western platforms.

The Big Picture of and Deepseek Artificial Intelligence (AI)

DeepSeek’s rise signals that the AI playing field may be leveling faster than expected.

  • For Europe, it’s a chance to break free from U.S.–China dominance by betting on efficient, open models.
  • For Asia, it opens opportunities for smaller nations to adopt AI quickly, though they must navigate geopolitical rivalries.
  • For Africa, it represents perhaps the biggest opportunity—affordable AI could leapfrog infrastructural challenges and unlock growth, much like mobile banking did.

DeepSeek and the Future of AI Leadership: Disruption or Detour?

Let’s pause and evaluate the claims around DeepSeek artificial intelligence more critically. The company insists that its breakthrough model, R1, was developed at a remarkably low cost — about $5.6 million. Interestingly, the industry seems to be taking this claim at face value, even though the details remain incomplete. For example, DeepSeek did not disclose how much it spent on research and development, which can often be one of the largest expenses in AI. Still, most analysts agree the total was nowhere near the billions of dollars typically invested by American firms.

One impressive achievement does not overturn an entire industry’s trajectory. The United States has built its AI leadership over years of research, infrastructure, and capital investment. While R1 is attracting attention, a massive customer migration away from U.S. platforms toward a young Chinese startup is not on the horizon—at least not yet.

Market analysts are reflecting this tension

Keith Lerner of Truist points out that DeepSeek’s rollout has investors questioning whether U.S. companies are spending wisely, or overspending, on AI development. Yet his conclusion is that the required investment in AI will remain very high, and that U.S. firms continue to hold a leadership position.

It’s also important to recognize the limits of DeepSeek’s accomplishment. R1 is essentially a ChatGPT competitor—a large language model aimed at consumers. It has not yet demonstrated the ability to manage the far more ambitious industrial-scale AI applications, which demand massive data infrastructure and advanced hardware investments.

Finally, some experts believe that the U.S. still holds the greatest promise for the future of AI. Giuseppe Sette, president of Reflexivity, argues that with its combination of deep talent pools and vast capital, the U.S. remains the most likely environment for the emergence of truly self-improving AI systems. So, in summary, while DeepSeek’s efficiency has startled the market, it should be seen as a challenge to U.S. dominance, not the end of it.

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