DeepSeek R1: Everything You Need to Know

Perpetrator of Bloody Monday for the USA

DeepSeek and its new AI shook up the tech community.

Everyone in Silicon Valley, including Sam Altman, Andrej Karpathy, and Marc Andreessen, is discussing the latest R1 model. It’s also tearing up the App Store charts and has outperformed ChatGPT in severe tests.

And it's open source. So, you can try it out on your PC for free (I’ll show you how).

Let's talk about this “blue whale,” its AI model, and why it matters.

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Where Did DeepSeek Come From?

Yes, from China, but that is not the point.

DeepSeek is a small company from the eastern Chinese city of Hangzhou, founded in May 2023. This city is well known for its large volume of technology firms. Like the developer of ChatGPT, the Chinese startup didn’t start as part of big tech.

DeepSeek is not among the four dominant Chinese tech companies: Baidu, Alibaba, Tencent, and Xiaomi. The leading investor (and startup founder) is the hedge fund High-Flyer, built by three engineers, Liang Wenfeng, Xu Jin, and Zheng Dawei.

These partners were immersed in AI in 2016 when they were using the technology in the trading industry. Two years later, they had more than $1.4B; in October 2024, they had about $7B. Some of these funds were spent on running its own supercomputer and the launch of DeepSeek.

But that doesn't mean the startup wastes money.

DeepSeek spent only $5.6M and two months building its best AI model. This is pennies compared to the amount OpenAI, Google, and Nvidia invest in the industry. And right after the release of DeepSeek R1, the stocks of major tech firms in the US plummeted.

In one day, Big Tech lost over $1.5T! Specifically, Nvidia's capitalization sagged by $600B, the company's biggest single-day drop. All thanks to one Chinese model.

Speaking of its latest AI.

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DeepSeek R1: Hype, Performance, and Political Concerns

The main reason we gathered is the hype surrounding DeepSeek R1. It kicked off last November when the startup showed the R1-Lite Preview. That release went relatively unnoticed by the masses: the AI was limited to 50 messages and didn't offer an API.

However, top industry figures paid attention to the model even then.