[cosmojg]

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.

[huijzer]

> If anything, they're likely trying to commoditize their complement in a way not all that dissimilar from Meta's approach.

Thanks. Great observation. Sounds indeed extremely plausible that they use the LLM for automated data cleaning.

[epicureanideal]

I wonder if they shorted NVDA before releasing the model?

[ddalex]

wouldn't that be outsider trading ?

[_DeadFred_]

'... that's right people, forget SPARKs, this season the 'it crowd' are spinning up companies solely to create turmoil so that they can short stocks.'

[whimsicalism]

more of a pivot, China started cracking down heavily on quants in 2024

[silisili]

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?

[sudosysgen]

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

[whimsicalism]

almost all quant work is 'HFT'

[sudosysgen]

Absolutely not. The large majority quant work is mid frequency, on the other of seconds to minutes.

[frankc]

This is wrong. There are plenty of quant strategies that aren't a race.

[whimsicalism]

most quant money/employment is among market makers who are not holding for longer than a day and most trades probably complete within a few seconds.

regardless, high-flyer is an HFT firm

[sudosysgen]

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.

[YetAnotherNick]

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.

[adventured]

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.

[YetAnotherNick]

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.

[1]: https://en.wikipedia.org/wiki/High-Flyer

[lenerdenator]

Something tells me it runs a bit deeper than that. Economics can be a very effective weapon.

[2-3-7-43-1807]

such people are trained in identifying opportunities and turning that into money or power. they are not giving their stuff away without a strategy.

[babyent]

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.

[Zamiel_Snawley]

If you’re expecting to pop a bubble I think you’d buy options ahead of time to take advantage, instead of waiting for a recovery that may never come.

[babyent]

Well, nvidia stocks already up 10%

I know it is too early, but I'd not be surprised if this was CCP intervention using a hedge fund to try and tank US AI stocks for a specific reason.

I mean again, just being objectively honest, Deepseek kind of sucks and is maybe on par with early-2023 era models.