DeepSeek

Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd., doing business as DeepSeek, is a Chinese artificial intelligence company that develops large language models (LLMs). Based in Hangzhou, Zhejiang, it is owned and funded by the Chinese hedge fund High-Flyer. DeepSeek was founded in July 2023 by Liang Wenfeng, the co-founder of High-Flyer, who also serves as the CEO for both companies. The company launched an eponymous chatbot alongside its DeepSeek-R1 model in January 2025.
Released under the MIT License, DeepSeek-R1 provides responses comparable to other contemporary large language models, such as OpenAI's GPT-4 and o1. Its training cost is reported to be significantly lower than other LLMs. The company claims that it trained its V3 model for US$6 million—far less than the US$100 million cost for OpenAI's GPT-4 in 2023—and using approximately one-tenth the computing power consumed by Meta's comparable model, Llama 3.1. DeepSeek's success against larger and more established rivals has been described as "upending AI".
DeepSeek's models are described as "open weight," meaning the exact parameters are openly shared, although certain usage conditions differ from typical open-source software. The company reportedly recruits AI researchers from top Chinese universities and also hires from outside traditional computer science fields to broaden its models' knowledge and capabilities.
DeepSeek significantly reduced training expenses for their R1 model by incorporating techniques such as mixture of experts (MoE) layers. The company also trained its models during ongoing trade restrictions on AI chip exports to China, using weaker AI chips intended for export and employing fewer units overall. Observers say this breakthrough sent "shock waves" through the industry, threatening established AI hardware leaders such as Nvidia; Nvidia's share price dropped sharply, losing US$600 billion in market value, the largest single-company decline in U.S. stock market history.
In February 2016, High-Flyer was co-founded by AI enthusiast Liang Wenfeng, who had been trading since the 2007–2008 financial crisis while attending Zhejiang University. The company began stock trading using a GPU-dependent deep learning model on 21 October 2016; before then, it had used CPU-based linear models. By the end of 2017, most of its trading was driven by AI.
Liang established High-Flyer as a hedge fund focused on developing and using AI trading algorithms, and by 2021 the firm was using AI exclusively, often using Nvidia chips.
In 2019, the company began constructing its first computing cluster, Fire-Flyer, at a cost of 200 million yuan; it contained 1,100 GPUs interconnected at 200 Gbit/s and was retired after 1.5 years in operation.
By 2021, Liang had started buying large quantities of Nvidia GPUs for an AI project, reportedly obtaining 10,000 Nvidia A100 GPUs before the United States restricted chip sales to China. Computing cluster Fire-Flyer 2 began construction in 2021 with a budget of 1 billion yuan.
It was reported that in 2022, Fire-Flyer 2's capacity had been used at over 96%, totaling 56.74 million GPU hours. 27% was used to support scientific computing outside the company.
During 2022, Fire-Flyer 2 had 5000 PCIe A100 GPUs in 625 nodes, each containing 8 GPUs. At the time, it exclusively used PCIe instead of the DGX version of A100, since at the time the models it trained could fit within a single 40 GB GPU VRAM and so there was no need for the higher bandwidth of DGX (i.e., it required only data parallelism but not model parallelism). Later, it incorporated NVLinks and NCCL (Nvidia Collective Communications Library) to train larger models that required model parallelism.
On 14 April 2023, High-Flyer announced the launch of an artificial general intelligence (AGI) research lab, stating that the new lab would focus on developing AI tools unrelated to the firm's financial business. Two months later, on 17 July 2023,, that lab was spun off into an independent company, DeepSeek, with High-Flyer as its principal investor and backer. Venture capital investors were reluctant to provide funding, as they considered it unlikely that the venture would be able to quickly generate an "exit".
On 16 May 2023, the company Beijing DeepSeek Artificial Intelligence Basic Technology Research Company, Limited. was incorporated. It was later taken under 100% control of Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd, which was incorporated two months after.
DeepSeek released its first model, DeepSeek Coder, on 2 November 2023, followed by the DeepSeek-LLM series on 29 November 2023. In January 2024, it released two DeepSeek-MoE models (Base and Chat), and in April three DeepSeek-Math models (Base, Instruct, and RL).
DeepSeek-V2 was released in May 2024, followed a month later by the DeepSeek-Coder V2 series. In September 2024, DeepSeek V2.5 was introduced and revised in December. On 20 November 2024, the preview of DeepSeek-R1-Lite became available via API and chat. In December, DeepSeek-V3-Base and DeepSeek-V3 (chat) were released.
On 20 January 2025, DeepSeek launched the DeepSeek chatbot—based on the DeepSeek-R1 model—free for iOS and Android. By 27 January, DeepSeek surpassed ChatGPT as the most downloaded freeware app on the iOS App Store in the United States, triggering an 18% drop in Nvidia's share price.
On 24 March 2025, DeepSeek released DeepSeek-V3-0324 under the MIT License.
DeepSeek is headquartered in Hangzhou, Zhejiang, and is owned and funded by High-Flyer. Its co-founder, Liang Wenfeng, serves as CEO. As of May 2024, Liang personally held an 84% stake in DeepSeek through two shell corporations.
DeepSeek states that it focuses on research and does not have immediate plans for commercialization. This posture also means it can skirt certain provisions of China's AI regulations aimed at consumer-facing technologies.
DeepSeek's hiring approach emphasizes skills over lengthy work experience, resulting in many hires fresh out of university. The company likewise recruits individuals without computer science backgrounds to expand the range of expertise incorporated into the models, for instance in poetry or advanced mathematics.
High-Flyer/DeepSeek operates at least two primary computing clusters: Fire-Flyer (萤火一号) and Fire-Flyer 2 (萤火二号). Fire-Flyer 2 consists of co-designed software and hardware architecture. On the hardware side, Nvidia GPUs use 200 Gbps interconnects. The cluster is divided into two "zones", and the platform supports cross-zone tasks. The network topology was two fat trees, chosen for high bisection bandwidth. On the software side are:
As of 2022, Fire-Flyer 2 had 5000 PCIe A100 GPUs in 625 nodes, each containing 8 GPUs. It later incorporated NVLinks and NCCL to train larger models that required model parallelism.
The first DeepSeek models were essentially the same as Llama, which were dense decoder-only transformers. Later models incorporated the multi-head latent attention (MLA), Mixture of Experts (MoE), and KV caching.
A decoder-only transformer consists of multiple identical decoder layers. Each of these layers features two main components: an attention layer and a FeedForward network (FFN) layer. In the attention layer, the traditional multi-head attention mechanism has been enhanced with multi-head latent attention. This update introduces compressed latent vectors to boost performance and reduce memory usage during inference.
Meanwhile, the FFN layer adopts a variant of the mixture of experts (MoE) approach, effectively doubling the number of experts compared to standard implementations. It distinguishes between two types of experts: shared experts, which are always active to encapsulate general knowledge, and routed experts, only a select few of which are activated to capture specialized information.
Consider the current sequence of n tokens as input. To predict the next token based on the current input, the attention mechanism involves extensive calculations of matrices, including query (Q), key (K), and value (V) matrices. The dimensions of Q, K, and V are determined by the current number of tokens and the model’s embedding size. Once the new token is generated, the autoregressive procedure appends it to the end of the input sequence, and the transformer layers repeat the matrix calculation for the next token. A mathematical analysis reveals that the new token introduces a new query, key, and value vector, appended to Q, K, and V, respectively. Appending these new vectors to the K and V matrices is sufficient for calculating the next token prediction. Consequently, storing the current K and V matrices in memory saves time by avoiding the recalculation of the attention matrix. This feature is known as K-V caching. This technique effectively reduces computational cost during inference.
DeepSeek's models are "open weight", which provides less freedom for modification than true open source software.
DeepSeek Coder is a series of eight models, four pretrained (Base) and four instruction-finetuned (Instruct). All have 16K context lengths. The model was made source-available under the DeepSeek License, which includes "open and responsible downstream usage" restrictions.
The training program was:
They were trained on clusters of A100 and H800 Nvidia GPUs, connected by InfiniBand, NVLink, NVSwitch.
The DeepSeek-LLM series was released in November 2023. It has 7B and 67B parameters in both Base and Chat forms. DeepSeek's accompanying paper claimed benchmark results higher than Llama 2 and most open-source LLMs at the time. The model code is under the source-available DeepSeek License.
The architecture was essentially the same as the Llama series. They used the pre-norm decoder-only Transformer with RMSNorm as the normalization, SwiGLU in the feedforward layers, rotary positional embedding (RoPE), and grouped-query attention (GQA). Both had vocabulary size 102,400 (byte-level BPE) and context length of 4096. They trained on 2 trillion tokens of English and Chinese text obtained by deduplicating the Common Crawl.
The Chat versions of the two Base models was released concurrently, obtained by training Base by supervised finetuning (SFT) followed by direct policy optimization (DPO).
DeepSeek-MoE models (Base and Chat), each have 16B parameters (2.7B activated per token, 4K context length). The training was essentially the same as DeepSeek-LLM 7B, and was trained on a part of its training dataset. They claimed performance comparable to a 16B MoE as a 7B non-MoE. It is a variant of the standard sparsely-gated MoE, with "shared experts" that are always queried, and "routed experts" that might not be. They found this to help with expert balancing. In standard MoE, some experts can become overused, while others are rarely used, wasting space. Attempting to balance expert usage causes experts to replicate the same capacity. They proposed the shared experts to learn core capacities that are often used, and let the routed experts learn peripheral capacities that are rarely used.
DeepSeek-Math includes 3 models: Base, Instruct, and RL. Math was trained as follows:
In May 2024, DeepSeek released the DeepSeek-V2 series. The series includes 4 models, 2 base models (DeepSeek-V2, DeepSeek-V2 Lite) and 2 chatbots (Chat). The two larger models were trained as follows:
They opted for 2-staged RL, because they found that RL on reasoning data had "unique characteristics" different from RL on general data. For example, RL on reasoning could improve over more training steps.
The two V2-Lite models were smaller, and trained similarly. DeepSeek-V2 Lite-Chat underwent only SFT, not RL. They trained the Lite version to help "further research and development on MLA and DeepSeekMoE".
Architecturally, the V2 models were significantly different from the DeepSeek LLM series. They changed the standard attention mechanism by a low-rank approximation called multi-head latent attention (MLA), and used the previously published mixture of experts (MoE) variant.
The Financial Times reported that it was cheaper than its peers with a price of 2 RMB for every million output tokens. The University of Waterloo Tiger Lab's leaderboard ranked DeepSeek-V2 seventh on its LLM ranking.
The DeepSeek-Coder V2 series included V2-Base, V2-Lite-Base, V2-Instruct, and V20-Lite-Instruct.. Training:
DeepSeek-V2.5 was made by combining DeepSeek-V2-Chat and DeepSeek-Coder-V2-Instruct.
DeepSeek-V3-Base and DeepSeek-V3 (a chat model) use essentially the same architecture as V2 with the addition of multi-token prediction, which (optionally) decodes extra tokens faster but less accurately. Training process:
DeepSeek released its DeepSeek-V3-0324 model, which used the same architecture as V3, on 24 March 2025 under the MIT License.
The DeepSeek team performed extensive low-level engineering to improve efficiency. They used mixed-precision arithmetic. Much of the forward pass was performed in 8-bit floating point numbers (5E2M: 5-bit exponent and 2-bit mantissa) rather than the standard 32-bit, requiring special GEMM routines to accumulate accurately. They used a custom 12-bit float (E5M6) only for the inputs to the linear layers after the attention modules. Optimizer states were in 16-bit (BF16). They minimized communication latency by extensively overlapping computation and communication, such as dedicating 20 streaming multiprocessors out of 132 per H800 for only inter-GPU communication. They lowered communication by rearranging (every 10 minutes) the exact machine each expert was on so as to avoid querying certain machines more often than others, adding auxiliary load-balancing losses to the training loss function, and other load-balancing techniques.
After training, it was deployed on clusters of H800 GPUs. The 8 H800 GPUs within a cluster were connected by NVLink, and the clusters were connected by InfiniBand.
The cost has been discussed and called misleading, because it covers only parts of the true cost.
Benchmark tests show that V3 outperformed Llama 3.1 and Qwen 2.5 while matching GPT-4o and Claude 3.5 Sonnet.
In January 2025, DeepSeek released the DeepSeek-R1 model under the MIT License.
DeepSeek-R1-Lite-Preview was trained for logical inference, mathematical reasoning, and real-time problem-solving. DeepSeek claimed that it exceeded performance of OpenAI o1 on benchmarks such as American Invitational Mathematics Examination (AIME) and MATH. However, The Wall Street Journal reported that on 15 problems from the 2024 edition of AIME, the o1 model reached a solution faster.
DeepSeek-R1 and DeepSeek-R1-Zero were initialized from DeepSeek-V3-Base and share its architecture. DeepSeek-R1-Distill models were instead initialized from other pretrained open-weight models, including LLaMA and Qwen, then fine-tuned on synthetic data generated by R1.
DeepSeek-R1-Zero was trained exclusively using GRPO RL without SFT. Unlike previous versions, it used no model-based reward. All reward functions were rule-based, "mainly" of two types (other types were not specified): accuracy rewards and format rewards. Accuracy reward was checking whether a boxed answer is correct (for math) or whether a code passes tests (for programming). Format reward was checking whether the model puts its thinking trace within a <think>...</think> tag.
R1-Zero has issues with readability and mixing languages. R1 was trained to address these issues and further improve reasoning:
Distilled models were trained by SFT on 800K data synthesized from DeepSeek-R1, in a similar way as step 3. They were not trained with RL.
R2, the successor to R1, is originally planned for release in early May 2025, but release schedule accelerated.
DeepSeek's success against larger and more established rivals has been described as "upending AI".
The DeepSeek-R1 model provides responses comparable to other contemporary large language models, such as OpenAI's GPT-4o and o1. Its training cost is reported to be significantly lower than other LLMs.
The company claims that it trained V3, a predecessor of R1, for US$6 million compared to $100 million for OpenAI's GPT-4 in 2023, and approximately one tenth of the computing power used for Meta's comparable model, LLaMA 3.1.
The January 2025 release of the R1 model, which offered significantly lower costs than competing models, some investors anticipated a price war in the American AI industry. It was dubbed the "Pinduoduo of AI", and other Chinese tech giants such as ByteDance, Tencent, Baidu, and Alibaba cut the price of their AI models. Despite its low price, it was profitable compared to its money-losing rivals.