Background of DeepSeek

DeepSeek, a Chinese artificial intelligence research lab, has steadily grown into a notable player in AI development, drawing attention to China’s evolving position in the global AI landscape. While DeepSeek operates as an independent entity, it originated as a long-running side project within High-Flyer (??), a leading quantitative trading firm based in Hangzhou—home to major AI-driven companies such as Alibaba and Ant Financial.

High-Flyer is well known in China’s financial sector for its AI-driven quantitative trading strategies. The firm integrates deep neural networks with extensive market, macroeconomic, and alternative data to develop and execute systematic investment models. With substantial investment in R&D, a team of AI specialists, and advanced computing infrastructure, High-Flyer continuously refines its predictive models and enhances its trading strategies. DeepSeek has benefited from this foundation. With access to High-Flyer’s technical expertise, computational resources, and research capabilities, it has been able to expand beyond financial applications and establish itself as a serious contender in AI research. This background positions DeepSeek as a key player in China’s broader AI ambitions.

DeepSeek’s AI Capabilities

DeepSeek has achieved notable progress in the development of large language models, gaining recognition for its ability to create models comparable to those of established players like OpenAI’s ChatGPT, but at a significantly lower cost estimated to be around $US5.5 million. Further, DeepSeek’s flagship model, DeepSeek-R1, has achieved rapid development, reportedly created in just two months, contrasting sharply with the lengthy, expensive development timelines typically required for such models. However, some experts have raised questions about the rapid development of DeepSeek’s models, speculating that prior investments and strategic resource accumulation may have played a significant role in expediting the process.

In comparison to ChatGPT, which charges users for premium services and requires significant infrastructure for deployment, DeepSeek’s approach to offering its AI services for free is notable. This strategy positions the company as an attractive option for businesses and developers looking to integrate AI solutions without the financial burden that often accompanies large-scale LLM applications. By offering its services for free, DeepSeek can potentially disrupt the market for AI tools, especially in a region like China, where access to cutting-edge technology is often more restricted due to geopolitical tensions.

DeepSeek’s success in developing and deploying AI models at scale has wider geopolitical implications. The company’s ability to create competitive AI technologies despite ongoing US restrictions on semiconductor exports underscores China’s resilience in advancing its AI capabilities. This development highlights the intensifying competition between China and the US in the realm of AI, with China finding alternative means to secure the necessary resources for AI advancement. This will likely push both nations to accelerate their AI strategies, further intensifying the global race for technological leadership.

AI’s Expanding Role: Beyond Chatbots

While much of the discussion around DeepSeek has centred on AI language models, the real implications of China’s rapid AI progress extend far beyond chatbots. In recent years, AI has demonstrated its potential in physical automation and robotics. Such developments underscore AI’s expanding potential beyond language models, highlighting its transformative role in sectors like disaster response and public safety.

The recent Los Angeles wildfires, once again underscored the urgent need for advanced firefighting technology. The devastation raises a crucial question: How can artificial intelligence and robotics help prevent and combat such disasters more effectively?

AI-powered fire detection is already being trialled in multiple regions, including Australia, where fire towers equipped with AI-enhanced cameras scan vast landscapes for early signs of smoke, helping authorities respond faster. Meanwhile, AI-driven simulation models, such as the NSW Rural Fire Service’s Athena system, analyse real-time weather, topography, and fuel loads to predict fire behaviour with unprecedented accuracy.

Another aspect is the development of autonomous firefighting drones and robotic systems. Scout drones, currently being tested by researchers, can detect lightning-induced ignitions in remote areas, while water gliders—essentially disposable firefighting drones—can be deployed from aircraft to douse flames in hard-to-reach locations. Such advancements could have made a tangible difference in the LA fires, where embers carried by extreme winds overwhelmed human firefighting efforts.

AI and Robotics in Culture

While DeepSeek’s work is primarily focused on research and development, the application of AI in culture also warrants attention. At the 2025 Chinese Spring Festival Gala, AI and robotics were showcased in a remarkable display of human creativity and technological progress.

The intersection of AI, robotics, and human creativity was evident at the 2025 Chinese Spring Festival Gala, where an ensemble of robotic dancers demonstrated fluid movements and exceptional precision. These humanoid robots, programmed with advanced motion algorithms, performed complex routines, including the traditional art of spinning handkerchiefs with remarkable dexterity. Such developments suggest a future in which AI-driven robots extend beyond industrial applications to play a meaningful role in entertainment and artistic expression. The ability to program robots with nuanced motion control and real-time adaptability has potential implications across various fields, from automated manufacturing to rehabilitation therapy and space exploration.

However, for many viewers watching from home, the spectacle may have also prompted a sense of unease, as the sight of such advanced robotics raises questions about their potential misuse. In a world where AI systems can be programmed with increasing sophistication, the prospect of robots being repurposed for less benevolent purposes, such as warfare or surveillance, becomes a real concern. While the technology promises progress, it also highlights the need for thoughtful regulation and ethical considerations in its development and application.

Data Privacy

While DeepSeek’s capabilities are impressive, in the realm of artificial intelligence, data privacy remains a paramount concern. If we look at other AI-based applications such as ChatGPT, it adheres to stringent data protection standards, particularly those prevalent in Western countries. OpenAI’s privacy policy emphasises that user data is collected to enhance model performance, with measures in place to protect personal information. Notably, ChatGPT does not access data beyond what users explicitly provide during interactions.

Conversely, DeepSeek, a Chinese AI chatbot, has recently come under scrutiny for its data handling practices. Investigations have revealed that DeepSeek collects extensive personal information and stores it on servers located in China. This practice has raised significant concerns, as Chinese companies are legally obligated to share data with government authorities upon request. Furthermore, a security lapse exposed a publicly accessible database containing over a million lines of sensitive information, including chat histories and secret keys.

Given the above concerns, countries such as Italy have already taken measures to block DeepSeek, due to DeepSeek’s inability to address the concerns of Italy’s data protection authority about DeepSeek’s privacy policy. Meanwhile, other European countries such as France and Ireland are also questioning DeepSeek’s privacy policy. At the time of writing this article, more countries in Europe including Germany are making statements about potential investigations into the privacy policy of DeepSeek.

The Future of AI: A New Global Landscape

Market reactions to DeepSeek’s rise have been pronounced. Following the company’s announcement, Nvidia, the world’s largest AI chip supplier, experienced a sharp decline in stock value. This reflects broader investor concerns that the AI market, previously dominated by US firms, is undergoing a significant realignment. However, analysts argue that rather than leading to a collapse, this shift may instead foster increased global investment in AI innovation.

One of the critical concerns emerging from this intensifying competition is the potential erosion of responsible AI governance. As nations prioritise maintaining a technological edge, regulatory oversight and ethical considerations could be deprioritised. Some experts warn that the AI arms race may lead to a more fragmented and less transparent AI ecosystem, where safety and long-term societal impact are secondary to geopolitical ambitions.

The rise of DeepSeek highlights a pivotal moment in the global AI race, one in which competition between the US and China is reshaping the landscape. While this may spur innovation, experts warn that prioritising technological dominance could risk undermining ethical considerations and responsible governance.