In 2022, under the pseudonym “an ordinary little pig”, the founder of artificial intelligence (AI) start-up DeepSeek quietly donated 138 million yuan (US$19 million) to Chinese charities. The name, a nod to Wang Xiaobo’s dark-humour short story “A Maverick Pig”, reportedly masked the true identity of Liang Wenfeng, a man whose quantum trading operation was facing mounting regulatory pressure.
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On January 28 that year, Liang’s hedge fund High-Flyer Quant issued a statement to the public denying that its quantum trading was responsible for a plunge in Chinese stocks.
“In recent days, there was market gossip that a coordinated sell-off by quant trading institutions had led to a market downfall,” High-flyer said. “We’ve discussed with managers of the major players in the industry and they all denied such a thing. Please don’t believe the gossip, thanks.”
Three years later, DeepSeek, a spin-off from High-Flyer, would make headlines for actually being responsible for roiling the US stock market. On January 27, a massive sell-off wiped out nearly US$1 trillion in tech stocks, including US$600 billion from Nvidia alone.
The catalyst was the release of DeepSeek’s R1 reasoning model, which came just weeks after it unveiled the more traditional V3 large language model (LLM). These models rivalled the performance of OpenAI’s offerings at a fraction of the cost, casting doubt on the assumptions underpinning the high valuations of US chip and AI companies.
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