DeepSeek: China’s Rising AI Power and Its Global Impact By: Mackenzie Bailey

DeepSeek, a Chinese artificial intelligence startup, has quickly become a major player in the global AI world. Founded in July 2023 in Hangzhou, China, the company has created AI models that can compete with big Western companies, and they've done it at a much lower cost.[1] The company was founded by Liang Wenfeng, who graduated from Zhenjiang University with degrees in electronic information engineering and computer science.[2]

DeepSeek's main product is its large language models (LLMs), which are AI systems that can understand and create human-like text.[3] These models power chatbots and can create various types of content such as coding, problem solving, and content creation.[4] The platform is free to use and works similarly to ChatGPT, but with some key differences that have caught the world's attention.[5]

The company made global headlines with its latest model, DeepSeek R1, which caused a notable stir in the tech world and even affected US tech stocks.[6] What makes this model special is its size and efficiency.[7] DeepSeek has about 670 billion parameters (the variables it learns from during training), which makes DeepSeek R1 one of the largest open-source LLM available.[8]

However, what is interesting is how the DeepSeek R1 model uses these parameters. Instead of using all parameters at once, DeepSeek R1 uses a system called "mixture of experts" that only activates the relevant parameters needed for each task, usually tens of billions instead of hundreds of billions.[9] This smart approach, combined with a technique called multihead latent attention and the ability to generate multiple words at once, makes the R1 model both powerful and efficient.[10]

Perhaps the most surprising aspect of DeepSeek's success is its cost efficiency.[11] The company claims it spent only $6 million to train its model, which is dramatically less than the "over $100 million" that OpenAI spent on training its GPT-4.[12] DeepSeek also uses less computer memory than similar AI models, which helps keep operating costs low for users.[13]

This combination of high performance and low cost helped make DeepSeek's AI assistant incredibly popular; it became the most-downloaded free app on Apple's App Store when it launched in the US and has since been downloaded at least 1.6 million times worldwide, reaching the top spot in 140 countries.[14]

DeepSeek's success highlights China’s growing strength in AI technology and its ability to attract and retain the country’s top talent.[15] A rising trend among China’s AI elite is to reject Silicon Valley jobs in favor of domestic opportunities and is influenced by lower living costs, proximity to family, and early leadership roles.[16]DeepSeek has embraced this shift by recruiting young graduates and interns from top Chinese universities like Tsinghua and Peking.[17]

Additionally, DeepSeek’s passionate tech team aims to rival Silicon Valley giants despite U.S. chip sanctions.[18]“[DeepSeek] highlights the strength of China’s AI talent pool, supported by a large number of highly capable and skilled software engineers,” said Angela Zhang, a USC professor studying Chinese tech regulations.[19] “This talent advantage positions China strongly for the next phase of AI development.”[20]

While past generations of Chinese engineers sought Silicon Valley for higher pay and prestige, more young AI talent now stays home as China’s domestic AI industry expands. DeepSeek stands out by offering higher salaries and fostering a supportive work culture.[21] Unlike many Chinese tech firms with grueling hours and intense competition, Liang stated that he encourages employees to choose their tasks and access computing power freely.[22]

Further, DeepSeek’s impact on Chinese industry could be significant, as many companies have announced plans to use DeepSeek's models in their products and operations.[23] As Feng Ji, founder and CEO of Game Science, put it: "This jaw-dropping breakthrough has come from a purely Chinese company... DeepSeek may be a national-level technological and scientific achievement."[24]

Despite its success, DeepSeek faces increasing scrutiny from various countries.[25] Taiwan has banned the app for government agencies, public sector workers, and critical infrastructure providers, citing security concerns.[26] The Taiwanese Ministry of Digital Affairs simply stated: "DeepSeek AI service is a Chinese product,” which is a statement that carries significant weight given concerns about data security.[27]

Italy has gone further by completely blocking DeepSeek from processing data from its citizens.[28] DeepSeek has disappeared from app stores in Ireland, while the UK has issued warnings to its citizens.[29] Similar concerns are growing in Greece, Belgium, South Korea, and Australia, with calls for bans in these countries as well.[30]

The rapid rise of DeepSeek has caught the attention of US policymakers and tech leaders.[31] The success of this Chinese AI company, particularly its ability to develop advanced AI systems at a fraction of the cost, has contributed to increased US investment in AI development.[32] This includes preparations for a massive $500 billion investment in the Stargate project, which highlights the growing competition between the US and China in the AI sector.[33]

DeepSeek’s rapid rise in the AI industry highlight’s China’s growing influence in global technology and innovation. By combining cutting-edge technology with its cost-efficient strategies and a strong talent pipeline, DeepSeek has positioned itself as a fearsome competitor to Western tech giants. However, its success also underscores the global tensions surrounding AI development, as concerns over data security and technological dominance. As DeepSeek continues to shape the future of AI, its impact on both the global market and the ongoing US-China tech rivalry will be interesting to watch.

[1] Kelly Ng et al., DeepSeek: The Chinese AI App that has the world talking, BBC (Feb. 4, 2025) https://www.bbc.com/news/articles/c5yv5976z9po.

[2] Id.

[3] Sean Michael Kerner, DeepSeek explained: Everything you need to know, TechTarget (Feb. 6, 2025), https://www.techtarget.com/whatis/feature/DeepSeek-explained-Everything-you-need-to-know.

[4] Id.

[5] Id.

[6] Eduardo Baptista, What is DeepSeek and why is it disrupting the AI Sector, Reuters (Jan. 28, 2025), https://www.reuters.com/technology/artificial-intelligence/what-is-deepseek-why-is-it-disrupting-ai-sector-2025-01-27/.

[7] Stephanie Pappas, Why DeepSeek’s AI Model Just Became the Top-Rated App in the U.S., SCIAM (Jan. 27, 2025),https://www.scientificamerican.com/article/why-deepseeks-ai-model-just-became-the-top-rated-app-in-the-u-s/.

[8] Id.

[9] Id.

[10] Id.

[11] Shailesh Manjrekar, DeepSeek Revolutionizing AI Development Through Cost-Effective Innovation, Fabrix.ai (Jan. 30, 2025), https://fabrix.ai/blog/deepseek-revolutionizing-ai-development-through-cost-effective-innovation/.

[12] Anthony Cardillo, What is DeepSeek AI? (Features, OpenAI Comparison, & More, Exploding Topics (Jan. 31, 2025), https://explodingtopics.com/blog/deepseek-ai.

[13] Sean Michael Kerner, supra note 3.

[14] Kelly Ng, supra note 1.

[15] Viola Zhou, DeepSeek’s rise shows why China’s top AI talent is skipping Silicon Valley, Rest of World (Feb. 5, 2025), https://restofworld.org/2025/china-ai-talent-deepseek-rise-us-dominance/.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] Id.

[22] Id.

[23]DeepSeek gives China’s chipmakers leg up in race for cheaper AI, Reuters (Fed. 12, 2025), https://www.reuters.com/technology/artificial-intelligence/deepseek-gives-chinas-chipmakers-leg-up-race-cheaper-ai-2025-02-13/.

[24] Mithil Aggarwal, China heralds DeepSeek as a symbol of AI advancements amid U.S. restrictions. Yahoo!News (Jan. 29, 2025), https://www.yahoo.com/news/china-heralds-deepseek-symbol-ai-175304041.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAKlrVHbUrBmvTfEA_-Q4vphgyZ7SMGWpUS1bvnkpK_uBTKqZTkgbnCNwmiWC7lKt0KI_VeEPqo8VXaOX-6kmlGbsOUKgOtzoltgasOEz23q7XG3FBa7Q1TS2yBWUZ6b-EHCwlPTZtfURNT-Ir6s0zbih06p74ZtJjSScjLoovTpd.

[25] Eddie Wrenn, Why Are Governments Banning Deep Seek? Security Threats Explained, Techopedia (Feb. 4, 2025), https://www.techopedia.com/why-are-governments-banning-deepseek#:~:text=DeepSeek%20is%20accused%20of%20data%20leaks%20and%20potential,U.S.%20Navy%20have%20banned%20DeepSeek%20on%20government-issued%20devices.

[26] Id.

[27] Id.