Chinese quant whiz built DeepSeek amid fund rout

Three years ago, Liang Wenfeng‘s quantitative hedge fund firm apologised profusely to investors for losing money during a tumultuous period for China’s stock market.
It was a surprising stumble for Zhejiang High-Flyer Asset Management, which used artificial intelligence to pick stocks and had grown rapidly to become one of the country’s largest quant funds. As the firm navigated through that crisis and its assets shrunk by more than a third from a peak of more than $12 billion, behind the scenes Liang was laying the groundwork for a new AI startup, DeepSeek.
DeepSeek, which grew out of High-Flyer, is now threatening to upend the global AI supply chain and challenge the seemingly-unassailable US lead in critical frontier AI technologies. The sudden popularity of the 20-month-old firm’s breakthrough technology and its namesake app sparked a massive US and European stock rout on Monday, wiping out close to $1 trillion in combined market value from chip giant Nvidia and other peers.
It has also drawn shock and awe over how Liang, an engineering graduate who has never studied or worked outside of mainland China, pulled off such a feat. He has demonstrated that with local artificial intelligence engineers, constrained access to the latest semiconductor technologies and limited resources, it is possible to match – and even surpass – the best in the field.
The question now gripping investors, companies and policymakers is whether artificial intelligence requires hundreds of billions of dollars in capital expenditure to come up with the latest innovations and vanguard AI models – and whether export controls can hold off Chinese competition.
Liang has been compared to OpenAI founder Sam Altman, but the Chinese citizen keeps a much lower profile and seldom speaks publicly. “OpenAI is not a god and cannot always be at the forefront,” Liang told Chinese media outlet 36Kr in July 2024.
The previous year, Liang said more investment doesn’t necessarily lead to more innovation. He has also opined on how Chinese companies have long been mostly followers as opposed to technology innovators. The problem has been a “lack of confidence and not knowing how to organize high-density talents to achieve effective innovation,” he was quoted as saying.
An Outlier
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Liang was born in 1985 in Zhanjiang, an economically poor city in China’s southern Guangdong province. His father was an elementary school teacher. He studied electronic engineering at Zhejiang University, a prestigious college in the city of Hangzhou, and also earned a master’s degree in information and communication engineering there.R&D Funding
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DeepSeek’s research was funded by High-Flyer’s R&D budget, Liang said previously. It drew computing resources from the quant fund, which had amassed 10,000 Nvidia GPUs in 2021, prior to US bans on exports of sophisticated Nvidia chips and GPUs.Liang recruited engineering talent almost exclusively from China. Many were fresh out of top universities, interns in their final leg of doctoral studies and Olympiad medal holders. bloomberg