Five things to know about Chinese AI startup DeepSeek

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(FILES) This photo illustration shows the DeepSeek app on a mobile phone in Beijing on January 27, 2025. Chinese startup DeepSeek released a new artificial intelligence model on April 24, 2026, more than a year after it stunned the world with a low-cost chatbot that matched the capabilities of US rivals. (Photo by GREG BAKER / AFP)

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As DeepSeek releases its first major new artificial intelligence model in over a year — DeepSeek-V4 — here are five things to know about the Chinese startup:

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– ‘Sputnik moment’ –

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Founded by Liang Wenfeng in the eastern Chinese tech hub Hangzhou, DeepSeek started life in 2023 as a side project of Liang’s data-driven hedge fund that had access to a cache of powerful AI processors made by US chip giant Nvidia.

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It shot to global attention in January 2025 with the release of its R1 deep-reasoning large language model, which sparked a US tech share sell-off.

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Industry insiders were stunned by R1’s high performance — at a level similar to ChatGPT and other leading US chatbots — and DeepSeek’s claims to have developed it at a fraction of the cost.

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Venture capitalist Marc Andreessen described it as a “Sputnik moment” — referencing the 1957 launch of Earth’s first artificial satellite by the Soviet Union that stunned the Western world.

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– Censorship concerns –

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Like other Chinese chatbots, DeepSeek’s AI tools eschew topics usually censored in the world’s second-largest economy, such as the 1989 Tiananmen crackdown.

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That and data privacy concerns have led DeepSeek AI to be banned or restricted on government-issued devices in several countries, including the United States, Australia and South Korea.

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However, its low cost and ease of deployment have made it a popular choice in developing countries, analysts say.

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The company holds four percent of global market share for chatbots, according to web traffic analysis company Similarweb. ChatGPT dominates at 68 percent.

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– Open source –

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DeepSeek’s systems are open-source — meaning their inner workings are public, allowing programmers to customise parts of the software to suit their needs.

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That is the same for other major Chinese AI players, including tech giant Alibaba, in contrast to the “closed” models sold by OpenAI and other Western rivals.

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The Chinese government has trumpeted its lead in open-source AI technology, which it says can accelerate innovation.

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“Chinese AI models are leading the way in the open-source innovation ecosystem,” National People’s Congress spokesman Lou Qinjian told policymakers this month.

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– Startup boost –

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The success of DeepSeek has galvanised China’s AI scene, despite hurdles posed by rivalry with the United States, and fears of a global market bubble.

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Shares in two leading Chinese AI startups, Zhipu AI and MiniMax, soared on their market debuts in Hong Kong this year, and it has been a similar story for Chinese chipmakers such as MetaX.

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Shi Yaqiong and her team at Beijing-based Jinqiu Capital told AFP there has been a “clear surge” in enthusiasm around Chinese AI — and competition among investors — since the DeepSeek shock.

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– Chip smuggling reports –

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DeepSeek’s rise has not been without controversy.

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Reports, including in technology outlet The Information, say DeepSeek has been skirting a US ban on the export of top-end chips to China to train its new V4 model.

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The Information said in December, citing six people with knowledge of the matter, that DeepSeek developed V4 using thousands of chips dismantled in third countries and smuggled to China.

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DeepSeek did not respond to AFP’s request for comment. Nvidia did not respond to a request for comment but told The Information that they had not seen any evidence of this and that “such smuggling seems farfetched”.

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