After DeepSeek became a worldwide talking point and sent shock waves through the US stock market, many observers have been trying to find out how a relatively small company could become a game-changer for the AI industry.
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The Hangzhou-based start-up was founded only two years ago by a hedge fund High Flyer and it was little known before the launch of its large language model (LLM) last month.
It not only challenges the dominance of similar US products such as OpenAI’s ChatGPT, but also conventional wisdom about the cost of producing these products.
In recent weeks, the company has launched two powerful AI models – DeepSeek-V3 and DeepSeek-R1 – which were built at a fraction of the cost and computing power used by US tech giants for their products.
The announcement sent shares of semiconductor giant Nvidia and other AI-related stocks tumbling.
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Another surprise was that a Chinese company had been able to make such a breakthrough despite US sanctions.