Demystifying DeepSeek: 4 burning questions about China’s hottest AI start-up answered

Is DeepSeek funded by the Chinese government? How does it make money? SCMP editors answer the biggest questions about the company during a live webinar

Reading Time:3 minutes

DeepSeek’s innovation in developing high-performing AI models at low cost has put the company under the global microscope. Photo: Shutterstock

Published: 6:06pm, 10 Feb 2025Updated: 4:37pm, 11 Feb 2025

Chinese artificial intelligence (AI) start-up DeepSeek has continued to send ripples through the industry globally, while many questions remain surrounding the firm’s high-performance models developed at a fraction of the cost of their peers in the US.

In a China Future Tech webinar on Monday hosted by SCMP Plus, South China Morning Post technology editor Zhou Xin, China news editor Josephine Ma and technology production editor Matt Haldane joined moderator Jacques van Wersch to discuss common myths about the low-profile Hangzhou-based company and the implications of its achievements.

Does DeepSeek have government backing?

There is no public record suggesting that DeepSeek has received backing from the Chinese government.

The private company was started as a side project of High-Flyer, a quantitative hedge fund that built up powerful computing resources over years for the purpose of algorithmic trading. These resources were then put to use in expanding the fund’s focus to AI by building DeepSeek in 2023.

During a visit to its office in a commercial building in Hangzhou last month, the Post saw none of the hallmarks typical of a government-funded company, such as being based in a hi-tech park.

But as DeepSeek has become a national hero amid intensified efforts from the US to curb China’s AI progress, it would be easy for the company to secure state support going forward.