How Chinese AI Startup DeepSeek Made a Model that Rivals OpenAI

On January 20, DeepSeek, a relatively unknown AI research lab from China, released an open source model that's quickly become the talk of the town in Silicon Valley. According to a paper authored by the company, DeepSeek-R1 beats the industry's leading models like OpenAI o1 on several math and reasoning benchmarks. In fact, on many metrics that matter--capability, cost, openness--DeepSeek is giving Western AI giants a run for their money. US export controls have severely curtailed the ability of Chinese tech firms to compete on AI in the Western way--that is, infinitely scaling up by buying more chips and training for a longer period of time. As a result, most Chinese companies have focused on downstream applications rather than building their own models.