What is DeepSeek and why did it make headlines?

DeepSeek is an artificial intelligence company based in Hangzhou, China, backed by the quantitative hedge fund High-Flyer. It became world news in January 2025 when it released DeepSeek-R1, a reasoning model that performed close to leading American models on many benchmarks while being released openly for anyone to download.

Several things made the release a shock to the industry.

First, the reported cost. DeepSeek said it trained its underlying model for a small fraction of what major American labs were believed to spend. The exact figure is debated, since it excluded earlier research and hardware costs, but the message was clear: top-level AI might not need the enormous budgets everyone assumed.

Second, it was open. DeepSeek released the model weights under a permissive licence, which meant developers worldwide could run it, study it and build on it for free. That challenged the idea that the best AI would stay locked behind paid services.

Third, it worked around hardware limits. US export controls restricted China's access to the most advanced AI chips, yet DeepSeek achieved strong results through efficient engineering, such as mixture-of-experts architecture, where only part of the model activates for each token.

The reaction was dramatic. DeepSeek's app shot to the top of app store charts, and shares of AI chip companies, including NVIDIA, fell sharply in a single day as investors questioned how much computing power AI would really need.

DeepSeek has continued releasing new models since then, and it helped push other companies toward more openness and lower prices.

If you want to use DeepSeek, consider a few points. Its own app and website run on servers in China, and the company's privacy policy allows data to be stored there, which has led some governments and organisations to restrict its use on official devices. The hosted chatbot also follows Chinese content rules, so it may avoid or reshape answers on politically sensitive topics. Because the models are open, though, you can run them locally or through other providers, which addresses many of the privacy concerns.

DeepSeek's real legacy is showing that strong AI can be built efficiently and shared openly, a shift that has benefited developers and businesses everywhere.