DeepSeek is a "side project" run by High-Flyer, a Chinese quantitative hedge fund. They have no interest in directly competing with LLM providers like OpenAI and Anthropic. If anything, they're likely trying to commoditize their complement in a way not all that dissimilar from Meta's approach.
I'm curious about this. Two articles I've read all but said they basically failed as a quant and lost more than they gained. The wiki points out some losses, but some wins, so is unclear.
Have they actually pivoted, or are they just messing around to see what sticks?
Didn't they crack down mostly on HFT? I haven't heard of a huge crackdown on low/medium frequency quants, and LLM research has low crossover with high freq. quant stuff
Trading within a few seconds is not really considered HFT, it's mid-freq nowadays. High frequency is in microseconds end to end nowadays.
High-Flyer says it took directional bets and held positions, which makes at least part of it not HFT.
Also, I doubt that most quant money is in market making nowadays. That was true at some point and that's true of HFT, but I doubt it is of quant trading in general anymore.
Besides, High Flyer certainly isn't a market maker, or they wouldn't be a hedge fund. You can't really be both, hence with Citadel and Citadel Securities (Market Maker) are so strictly divided.
High-Flyer AUM is $7B, which is not a large hedge fund. It's deepseek division is probably higher value than the AUM(not even the hedge fund's value) if it goes to market. They probably have billions of dollars of GPUs.
They probably have tens of millions of dollars of GPUS. DeepSeek isn't an original model, it's a synthetic built by using GPT and Llama etc. That's how they did it so relatively inexpensively. Their accomplishment isn't riding on the back of billions of dollars of their investment into datacenters and GPUs.
Even in 2020, before GPT came they had $100 millions worth of GPU[1]. Now I am willing to bed it is above a billion dollar. We will never know as they likely have illegal GPUs due to export restrictions.
If they're a hedge fund they're probably trying to tank the US AI stocks so they can buy the dip and then in a few days/weeks it is back to business as usual.
I don't personally buy their story, and after having used Deepseek it kind of sucks and hallucinates a lot if I'm being objectively honest.
I mean a few million for this is okay - that's cool.. but it is useless. I can understand billions of dollars into something that actually works >50% of the time.
