DeepSeek goes quiet for lunar new year despite worldwide buzz

Workers at Chinese startup launched AI models that shook global markets – and then signed out for the holidays

Vishwam Sankaran
Wednesday 29 January 2025 00:07 EST
Comments
Related: China’s DeepSeek AI rattles tech industry

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

DeepSeek, the Chinese startup that shook the world of technology this week with its groundbreaking artificial intelligence models, has taken a break for the lunar new year holiday.

The firm rocked the industry and global stock markets – wiping off around a trillion dollars in value from US stocks on Monday – by releasing cost-effective and open-source AI models rivalling the most advanced models of American tech giants OpenAI, Google and Meta.

And while the Silicon Valley, the Wall Street and the American political establishment, including new president Donald Trump, were still discussing the implications of DeepSeek’s breakthrough, the company’s headquarters in Hangzhou went quiet for the weeklong lunar new year holiday.

The last update to DeepSeek was issued late on Monday, and local media reports said the start-up’s offices were deserted for the holidays from Tuesday morning.

The lunar new year is based on a 12-year cycle, each linked to an animal in the Chinese zodiac paired with one of the five elements of metal, wood, water, fire, and earth. The festivities began on Wednesday, marking the year of the wood snake.

Floor signage for the offices of DeepSeek in Beijing
Floor signage for the offices of DeepSeek in Beijing (AFP via Getty)

There was still buzz around the company, however, with security turning away uninvited guests at its headquarters, Tech in Asia reported.

The company claimed earlier this week that its advanced AI model, named R1, was trained at a fraction of the cost of its western rivals such as OpenAI’s ChatGPT, which employed a larger volume of expensive Nvidia chips to train.

DeepSeek said its AI model cost less than $6 million in computing power to train with older Nvidia H800 chips, in sharp contrast to the billions poured into creating similar systems by US companies like OpenAI, Meta and Google. The startup was forced to rely on older chips because the US had banned the export of advanced Nvidia systems to China in a bid to curtail its progress in AI.

Sam Altman Calls DeepSeek R1 an Impressive Model, Vows Much Better Models Ahead!

DeepSeek’s success against such steep odds quickly led to sharp changes in the fortunes of major American AI companies. Shares of Nvidia plunged 17 per cent on Tuesday, marking the biggest single-day loss in market value of a company in history of over $500bn (£402bn).

Mr Trump warned the Chinese startup’s success was a “wake-up call” for the US tech industry.

“DeepSeek’s release of a premium level AI tool, available freely, with a reported miniscule development cost has shaken faith in Silicon Valley and American dominance in the rapidly developing AI market,” Richard Whittle, an economist at the University of Salford, said.

Building housing the DeepSeek offices in Beijing
Building housing the DeepSeek offices in Beijing (AFP via Getty)

In spite of their remarkable achievement, the DeepSeek team keep a low profile. The startup’s controlling shareholder is Liang Wenfeng, who also co-founded a quantitative hedge fund called High-Flyer. It is unclear how much stake the hedge fund has in DeepSeek.

Government records indicate that High-Flyer owns patents for the chips used to train AI models.

Not much is publicly known about the other employees of Deepseek, whose official name, according to government records, is Hangzhou DeepSeek Artificial Intelligence Fundamental Technology Research Co Ltd.

A study posted by the company on its AI model in the arXiv database credits nearly 70 employees.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in