DeepSeek Takes a Break for Lunar New Year Amid Global Attention

DeepSeek, a Chinese startup, has made headlines recently with its innovative artificial intelligence models that have significantly impacted global markets.

The company has temporarily paused operations for the weeklong lunar new year holiday.

DeepSeek's AI models, particularly one known as R1, were released at a much lower cost than comparable models from American firms like OpenAI, Google, and Meta. These releases created a sudden shift in how people view the competitive AI landscape.

On the day of its launch, DeepSeek's advancements contributed to a loss of about one trillion dollars in US stock market values.

Holiday Timing

Even as discussions swirled in Silicon Valley and Wall Street regarding the implications of DeepSeek's breakthroughs, the company's offices in Hangzhou fell silent after the announcement was made on Monday. Reports indicate that office activities ceased on Tuesday morning as employees began their holiday break.

Celebrations for the lunar new year commenced on Wednesday, ushering in the year of the wood snake, which traditionally spans a 12-year cycle based on various animals and elements.

Impact on the Tech Industry

Despite the holiday break, the buzz around DeepSeek continued. Reports indicate that security personnel at the company's headquarters were busy turning away uninvited visitors.

DeepSeek claimed it had successfully trained its advanced AI model for less than $6 million, a stark contrast to the multi-billion-dollar investments made by its Western competitors. This was achieved using older Nvidia H800 chips, as current advanced chip exports to China have been restricted by the US.

The fallout from DeepSeek's success seen in the stock markets was dramatic. For instance, Nvidia faced a 17% decline in share value, marking a historic loss exceeding $500 billion.

Former President Donald Trump labeled DeepSeek's triumph as a necessary wake-up call for the American tech sector, emphasizing that the launch of a high-quality AI tool at a minimal cost has shaken confidence in American technological supremacy.

Under the Radar

Despite its remarkable advancements, the team behind DeepSeek maintains a low profile. The principal shareholder is Liang Wenfeng, who is also associated with a quantitative hedge fund named High-Flyer. It remains unclear how much of a stake High-Flyer has in DeepSeek.

Records show that High-Flyer owns patents for the chips used to train AI models, although specific details about DeepSeek's workforce are scarce. According to a study available in the arXiv database, the company credits nearly 70 employees for their work on the AI model.

AI, Startup, Investments