In recent weeks, many users have found themselves questioning the sudden surge of notifications regarding DeepSeek on their mobile devices. What exactly is DeepSeek, and why has it captured such intense interest and excitement upon its introduction? This curiosity stems from the rapid evolution of artificial intelligence (AI) technologies, and DeepSeek has positioned itself at the forefront of this digital revolution.

DeepSeek, officially known as Hangzhou Deep Seek Artificial Intelligence Basic Technology Research Co., Ltd., has its roots in a Chinese hedge fund named High-Flyer. In May 2023, High-Flyer spun off a separate entity: DeepSeek. This new company aims to create high-performance, cost-effective AI models with the mission of making AI technology more accessible, enabling more people to harness powerful AI tools in their daily lives.

One of the key points that distinguishes DeepSeek from other AI initiatives lies in its innovative technology advancements. The release of their large language model, DeepSeek-V3, in December 2022, marks a significant milestone. Utilizing a model with an astonishing 671 billion parameters developed through a mixture of experts (MoE) architecture, it was able to process 60 tokens per second — three times faster than its predecessor, V2. This launch generated a considerable buzz within the AI community.

Less than a month later, on January 20, 2023, the company unveiled DeepSeek-R1, a reasoning model that stunned the industry once again. Just a week later, on January 27, the DeepSeek application topped the free app download charts in both China's and the United States' Apple App Stores. To add to this momentum, January 31 saw tech giants such as NVIDIA, Amazon, and Microsoft announcing their integration of DeepSeek-R1 into their systems. All this success reflects a broader trend of deepening interest in AI technologies among leading enterprises in the tech sector.

The distinctions between the DeepSeek-V3 and the DeepSeek-R1-Distill models are particularly noteworthy. DeepSeek-V3 is designed for complex tasks and high-precision scenarios, such as long document analysis, multi-modal reasoning, and scientific computations. With support for thousands of training instances, it meets the demands of large-scale, distributed training. In contrast, the distilled version, DeepSeek-R1-Distill, is optimized for lightweight deployments and resource-constrained environments, such as edge device reasoning and rapid validation of AI applications for small to medium-sized enterprises. It can adapt flexibly to entry-level hardware, addressing an under-served segment of the market.

Recent statistics shared by Marc Andreessen, co-founder of a16Z and top venture capital figure in Silicon Valley, reveal DeepSeek's daily active user count to be 23% that of ChatGPT, alongside an impressive daily application download rate nearing five million. Furthermore, on February 5, 2023, JD Cloud announced the official integration of DeepSeek-R1 and DeepSeek-V3 models with configurations for both public and private cloud deployments. Shortly thereafter, leading cloud service providers such as Alibaba Cloud, Baidu Smart Cloud, Huawei Cloud, Tencent Cloud, Volcano Engine, and Tianyi Cloud announced their support for DeepSeek models.

What is it about DeepSeek that has garnered widespread affection and enthusiasm from users? Two major advantages stand out. First and foremost, successful products in the competitive market often possess a landmark quality: the ability to reduce costs while improving efficiency. This is a core strength of DeepSeek. The training cost for DeepSeek-V3 is a mere $5.576 million, approximately one-twentieth of that of GPT-4, yet its performance in tasks like logical reasoning and code generation rivals that of powerful models like GPT-4 and Claude-3.5-Sonnet. The cornerstone of this success lies not in brute force compute power but rather in algorithmic optimizations and data efficiency enhancements.

For perspective, GPT-5 is estimated to command a staggering $500 million just in training costs over a six-month period. Aside from cost efficiency, DeepSeek's commitment to open-source technology and flexible deployment options forms another defining advantage. By openly sharing model weights and detailed training processes, global AI researchers gain access to critical insights into algorithmic design and problem-solving approaches utilized within the model.

360 Group founder Zhou Hongyi has emphasized DeepSeek's genuine spirit of openness, contrasting it to platforms like OpenAI, which increasingly resort to closed models as they seek commercial success. While OpenAI positions itself as an advocate for open-source methodologies, its business decisions often seem at odds with its initial commitments to transparency and communal progress.

In the ever-evolving AI landscape, the need for efficient hardware infrastructure cannot be overstated. The GPUs utilized by DeepSeek largely originate from NVIDIA, laying the groundwork for the company's triumphs. According to evaluations by SemiAnalysis, DeepSeek boasts a substantial inventory of around 50,000 Hopper architecture GPUs, including 10,000 H800 and 10,000 H100 units. Additionally, they have acquired a significant number of H20 GPUs, specifically designed for the Chinese market. This broad GPU deployment serves not only DeepSeek but also High-Flyer, fulfilling diverse tasks such as trading, reasoning, training, and research.

Furthermore, early strategic investments into AI technology and hardware infrastructure by High-Flyer proved beneficial for DeepSeek's establishment. Back in 2021, High-Flyer was quick to recognize the potential of AI evolution by investing in 10,000 A100 GPUs for large-scale model training experiments. This foresight has bestowed the company a competitive edge that has now blossomed into the success enjoyed by DeepSeek.

On January 25, prior to the Lunar New Year, AMD made headlines by integrating the DeepSeek-V3 model into its Instinct MI300X GPU. Following this on January 31, NVIDIA announced that its NVIDIA NIM microservice preview would support the DeepSeek-R1 model, underlining the ongoing collaboration between leading tech firms and the burgeoning DeepSeek platform. Notably, Intel also pledged that DeepSeek could operate offline on AI PCs powered by Core processors. The DeepSeek-R1-1.5B model can manage tasks like translation, meeting minutes, and document drafting.

Achieving parity with top-tier models such as OpenAI's amid restricted computational resources symbolizes a major breakthrough for China's AI ecosystem. As the DeepSeek model continues to grow, the demand for GPUs is anticipated to escalate. Domestic GPU manufacturers are keenly aware of the opportunity this presents and are actively working towards compatibility, knowing that successful adaptation could facilitate not only DeepSeek's development but also enhance the market position of homegrown GPU technology.

In an intriguing sign of momentum, between February 1 and February 7 alone, eleven domestic AI chip companies announced their adaptation to DeepSeek. The launch of new models within the DeepSeek series marked the ascendance of companies like Huawei Cloud, which partnered with Siqi Flow to debut DeepSeek R1/V3 inference services backed by proprietary inference acceleration engines. This certainly indicates that a conglomerate of tech enterprises is converging on the shared goal of maximizing the capabilities of DeepSeek models within the domestic market.

In a broader context, DeepSeek’s advent has triggered new opportunities for domestic chip companies. The proliferation of large-scale models like DeepSeek demands a higher chip count, creating an upsurge in market opportunities. As enterprises seek AI solutions within various sectors, the opening provided by DeepSeek fosters an ideal environment for domestic chip developers to showcase their innovations.

Overall, DeepSeek represents a fertile ground for growth, innovation, and collaboration among domestic chip manufacturers, AI startups, and enterprise solutions. By linking the future of AI with China’s burgeoning tech space, this platform could truly reshape the dynamics of AI application and acceptance across multiple verticals and industries, contributing to a robust technological ecosystem.