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DeepSeek, a Chinese AI startup, anticipates the release of R2 model after the success of R1, which shook the global market with high performance at low cost. The company is distinguished by horizontal management and targeted investment in computational power. Beijing supports DeepSeek as international concerns grow over privacy and access to advanced chips.

Key points:

• DeepSeek wants to launch R2 ahead of schedule.
• R1 has demonstrated superior capabilities with less powerful hardware.
• The company operates with an innovative work culture and high economic incentives.
• China supports DeepSeek, but international restrictions on chips remain.

DeepSeek, an emerging Hangzhou-based technology company, is accelerating the launch of its next AI model, R2, initially scheduled for May. The company, which recently attracted international attention with its R1 model, aims to improve the quality of code generation and processing in languages other than English. The decision to bring forward the release came while the global AI industry still assimilates the impact of R1, which is capable of competing with products made with far greater resources.

DeepSeek founder Liang Wenfeng has built a company with an operating model far removed from the conventions of China’s tech industry, often characterized by rigid hierarchies and grueling work schedules. At DeepSeek, management is marked by collaboration and autonomy, with salaries significantly higher than the industry average. The approach taken stems from Liang’s experience in finance: High-Flyer, his quantitative hedge fund, is among the most prosperous in China and has reinvested heavily in AI research, anticipating industry challenges and amassing key computational capabilities before U.S. restrictions on advanced chips.

High-Flyer has invested billions of yuan in supercomputing infrastructure, including the Fire-Flyer II cluster, consisting of thousands of Nvidia A100 GPUs. This advantage allowed DeepSeek to develop innovative models by exploiting techniques such as Mixture-of-Experts (MoE) and latent multihead attention (MLA), which optimize the use of computational resources. The result was an extremely efficient and affordable AI system whose cost per inference was estimated to be up to 40 times lower than competing solutions.

While OpenAI and Google have had to adjust their prices and strategies in response to DeepSeek’s success, the Chinese startup has gained increasing government support. Founder Liang was received by Chinese Premier Li Qiang, and several local governments and state-owned enterprises have already implemented his models. However, DeepSeek’s growing influence has not gone unnoticed: some Western governments have begun to restrict its access, citing data protection concerns.

The geopolitical environment remains an obstacle to DeepSeek’s growth, with restrictions on advanced AI chips posing a major challenge for the company’s future.

Source: Reuters