An AI company called DeepSeek, took the U.S. stock market through a major shift. Liang Wenfeng, a 40-year-old former hedge fund manager, is behind this disruption and visualization closing the technological gap in China and the United States.
Who is Liang Wenfeng?
Liang Wenfeng was born in the 1980s in Guangdong, China, to parents who were teachers. Early exposure to academics led him to Zhejiang University, where he earned both a bachelor's and master's degree in information and communication engineering.
In 2015, Liang founded High-Flyer hedge fund that used advanced AI and mathematical models for investment strategies. The company took a major step in October 2016 when it launched its first AI-powered investment model. By 2017, High-Flyer was nearly completely dependent on the use of AI algorithms for stock trading, indicating deep commitment by Liang to artificial intelligence.
In 2021, Liang started collecting thousands of Nvidia GPUs. He expected to use these to create high-powered computing in AI development. But just as he had been setting his sights on something big, the Biden administration came in with restrictions on exporting advanced AI chips to China. So he shifted tactics and started utilizing computing resources in China to advance his AI agenda.
In 2023, Liang launched DeepSeek, an AI company that established itself despite its hampered potential in accessing cutting-edge chips by Nvidia.
Liang has been vocal about China's position in AI development. Speaking to Chinese tech outlet 36Kr, he emphasized the need for China to move beyond being a follower in the AI space:
"China must gradually transition to being a contributor in the AI industry, rather than continuing to ride on the coattails of others."
He also warned that if China fails to bridge the one- or two-year gap with the U.S. in AI, it will continue to lag.
Liang was among the few experts invited to a closed-door event on January 20, where Chinese Premier Li Qiang was present. Reports indicate that the discussions revolved around China's focus on breakthroughs in core and cutting-edge technologies.
Chinese government statements and Beijing University experts praise the potential of DeepSeek, with one expert even stating that the company may "create miracles." However, DeepSeek has stated that Liang is more of a low-profile man compared to other tech entrepreneurs.
What is DeepSeek?
DeepSeek launched with an initial funding of $1.4 million and quickly gained attention when its AI models were released for public download in the U.S. earlier this year. Within days, its app topped iPhone download charts, surpassing OpenAI’s ChatGPT.
The company claims that its AI model performs better than competitor AI products in mathematics, general knowledge, and question-answer tasks. DeepSeek's R1 model has been compared to products developed by OpenAI and Meta, with reports saying that its costs to train and develop models are lower than those of U.S. companies.
However, skeptics have questioned whether DeepSeek's actual costs are as low as the company claims.
Besides DeepSeek's impressive AI capabilities, the AI has been at the center of controversy over handling sensitive topics. Users have indicated that its chatbot will not answer questions pertaining to:
Treatment of Uyghurs in China
Taiwan's political status
The Tiananmen Square event of 1989
There are speculations that DeepSeek is being governed by Chinese government policies.
DeepSeek's impact on the U.S. stock market
The AI model of DeepSeek immediately and dramatically affected the U.S. stock market. The news caused a major selloff in tech stocks, with Nvidia losing nearly $600 billion in market value.
Billionaires Larry Ellison, Oracle chairman, and Jensen Huang, Nvidia CEO, saw their personal fortunes drop by $27.6 billion and $20.8 billion, respectively.
Former U.S. President Donald Trump reacted to DeepSeek's emergence with the comment that it was a "wake-up call" to American industries, but he has also praised the company, remarking:
"DeepSeek is a positive development because of its low costs."
While DeepSeek may have become one of the AI giants, the firm still has some limitations in relation to its accessibility to Nvidia's high-end chips. Liang has admitted to this as being a challenge for him but said he is looking forward to proceeding.
With its fast-growing AI models and increasing global presence, DeepSeek has positioned itself as a serious contender in the AI race.