DeepSeek Inside: Origins, Technology, and Impact

Abstract

The release of DeepSeek V3 and R1 in January 2025 caused steep declines in the stock prices of companies that provide generative artificial intelligence (GenAI) infrastructure technology and datacenter services. These two large language models (LLMs) came from a little-known Chinese startup with approximately 200 employees compared to at least 3,500 employees for industry-leader OpenAI. DeepSeek seemed to have developed this powerful technology much more cheaply than previously thought possible. If true, DeepSeek had the potential to disrupt the economics of the entire GenAI ecosystem and the dominance of U.S. companies ranging from OpenAI to Nvidia.