Juan Carlos López
Senior WriterAn engineer by training. A science and tech journalist by passion, vocation, and conviction. I've been writing professionally for over two decades, and I suspect I still have a long way to go. At Xataka, I write about many topics, but I mainly enjoy covering nuclear fusion, quantum physics, quantum computers, microprocessors, and TVs.
DeepSeek has been the AI sensation for almost three weeks. One key discussion surrounding the Chinese company’s AI model revolves around the hardware used for its training and the associated costs. Following DeepSeek, other AI models like s1 have emerged, which are reportedly even cheaper, but that’s not the main focus here.
What makes DeepSeek particularly noteworthy is its ability to offer a model for free that matches the quality of comparable AI offerings from OpenAI and Google. However, it’s still uncertain whether the training costs are as low as the company claims. This post aims to explore two important questions about DeepSeek: How the company generates revenue and whether it receives support from the Chinese government.
DeepSeek Has Become a Symbol of China
South China Morning Post editors Zhou Xin, Josephine Ma, and Matt Haldane hosted a webinar discussing the future of technology in China. Their insights into DeepSeek have garnered significant attention for a specific reason. They presented strong arguments that shed light on critical questions surrounding the company.
According to Xin, Ma, and Haldane, DeepSeek hasn’t received any funding from the Chinese government yet. Its parent company, High-Flyer, is a quantitative hedge fund that specializes in algorithmic trading. This means that the company employs advanced mathematical models and computational algorithms to make investment decisions with the highest possible likelihood of success.
DeepSeek originated as a side project of High-Flyer, designed to utilize its computing resources and explore the AI industry. There’s currently no evidence to suggest that it’s received any funding from the Chinese government. However, given its growing significance and status as a prominent representation of China in the field of AI, it’s conceivable that it may receive some form of support from the country’s government in the future.
DeepSeek is a free AI model, so how does the company generate revenue? High-Flyer currently doesn’t generate direct revenue from its AI model, relying instead on income from its quantitative trading business to support most of its operations. However, like many other AI companies, it charges for access to its models through its API. This suggests that, in the medium term, DeepSeek could become a crucial source of revenue for its parent company.
Image | Chris Ried
Related | How to Use DeepSeek: 36 Features and Tricks to Get the Most Out of This AI Model
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