Deep Lessons from DeepSeek

While the US blinked and the rest of the world woke up to a new force in GenAI, what lessons does this Black Swan event hold for countries like India? Here are five "deep" thoughts to consider,

- Raju Chellam

Here's a short story with a twist: Mr. Liang Wenfeng, the 40-year-old founder of DeepSeek, is a math enthusiast and graduated with a degree in AI from Zhejiang University in Hangzhou, Zhejiang Province, China. In 2015, he co-founded HighFlyer, a quantitative hedge fund that leverages mathematical modeling, statistical analysis, and computer algorithms to integrate AI into trading strategies. Under his leadership, the company's assets surged tenfold, from 1 billion yuan (US$138 million) in 2016 to 10 billion yuan by 2019. The twist? The company acquired more than 10,000 Nvidia GPUs just before US AI chip sanctions on China took effect on December 2, 2024.

Here's another: In 2019, Gregory Zuckerman, a seasoned investigative reporter for The Wall Street Journal, published "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution” which chronicled Jim Simons’ pioneering data-driven, algorithmic approach to outperforming the market. The twist? The Chinese translation of the book, released in 2021, had a preface by Mr Liang. In it, he detailed how Jim Simons significantly influenced his work and beliefs about utilizing mathematics to analyze financial data.

There is no doubt the DeepSeek tsunami has rattled the stock markets like never before. Shares of Nvidia, the poster child of the AI boom, sank 17% on January 27 and wiped US$593 billion off the chipmaker’s market value, marking it a record oneday loss of any US-listed company. Broadcom ended down 17.4% in the US, Google parent Alphabet was down 4.2%, and Microsoft fell 2.1%.

While the US blinked and the rest of the world woke up to a new force in GenAI, what lessons does this Black Swan event hold for countries like India? Here are five “deep” thoughts to consider, in alphabetical order:

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