{"id":823207,"date":"2025-01-31T07:11:43","date_gmt":"2025-01-31T13:11:43","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/01\/31\/inside-ai-firm-deepseek-and-its-billionaire-founders-net-worth\/"},"modified":"2025-01-31T07:11:43","modified_gmt":"2025-01-31T13:11:43","slug":"inside-ai-firm-deepseek-and-its-billionaire-founders-net-worth","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/01\/31\/inside-ai-firm-deepseek-and-its-billionaire-founders-net-worth\/","title":{"rendered":"Inside AI Firm DeepSeek And Its Billionaire Founder’s Net Worth"},"content":{"rendered":"
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The seemingly overnight success of DeepSeek wiped billions of dollars from the fortunes of the world\u2019s richest people\u2014and catapulted the Chinese AI firm\u2019s founder, Liang Wenfeng, into the three-comma-club.<\/h2>\n

By Giacomo Tognini<\/a> and Phoebe Liu<\/a><\/h4>\n
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On<\/abbr><\/strong> January 20, on the same day as Donald Trump\u2019s inauguration in Washington, Chinese premier Li Qiang held a meeting with experts to consult on the Chinese government\u2019s policies for the year ahead. It was a low-key event that got little attention outside of China. One of the few people to speak at the gathering was Liang Wenfeng, a bespectacled hedge fund founder and AI entrepreneur who was then little-known outside the country. That was also the day his firm DeepSeek launched its latest model, R1, and claimed it rivals OpenAI\u2019s latest reasoning model.<\/p>\n

Within a week, DeepSeek\u2019s app had rocketed to the top of app stores in the United States, dethroning those of its competitors including OpenAI\u2019s ChatGPT and Anthropic\u2019s Claude and turning Liang and his AI firm into household names.<\/a><\/p>\n

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Liang Wenfeng at the January 20 meeting with Chinese premier Li Qiang.<\/p>\n

CCTV<\/small><\/figcaption><\/figure>\n

The best-known AI startups in the U.S. are worth tens of billions of dollars\u2014ranging from $50 billion for Elon Musk\u2019s xAI to $157 billion for OpenAI\u2014and have raised huge sums from the world\u2019s most prominent investors, including Microsoft, Amazon and Silicon Valley\u2019s top venture capital shops. Unlike its U.S. competitors, DeepSeek appears to have no external investors outside of Liang and his three cofounders. According to Chinese corporate records, Liang owns about 84% of the Hangzhou-based firm, which he founded in 2023 and financed with funds from High-Flyer Capital Management, the quantitative trading hedge fund he cofounded in 2015.<\/p>\n

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How much is Liang\u2019s open-source AI model worth? Forbes<\/em> spoke to five analysts and investors who offered a range of potential valuations, but the three who provided a specific number agreed DeepSeek is worth at least $1 billion\u2014and potentially far more, despite the fact that it doesn\u2019t yet generate much revenue. Right now, DeepSeek has one paid product: developer access to its models. Its reasoning model costs $2.19 per million output tokens (on average 750,000 words), far less than OpenAI\u2019s $60. That low price could simply be to undercut larger competitors OpenAI and Anthropic to capture market share, but Forbes<\/em> estimates that DeepSeek generates around $6 million in annualized revenue per million paying users, using estimates of a typical user\u2019s token usage from investment firm D.A. Davidson.<\/p>\n

Apply that to a revenue multiple of 65 (somewhere between that of Anthropic and Chinese open-source AI startup 01.AI, which raised outside capital in late 2023), and DeepSeek would need around 3 million paying users to reach a billion-dollar valuation. More than 3.6 million people downloaded DeepSeek\u2019s app in its first two weeks, per Appfigures<\/a> data. William Blair partner and software analyst Arjun Bhatia thinks that less than 10% of that number are paying users\u2014but also says the multiple should be applied to DeepSeek\u2019s user count a year or two from now.<\/p>\n

Regardless of DeepSeek\u2019s exact revenue, Forbes <\/em>estimates it\u2019s worth at least $1 billion\u2014in part because state-of-the-art models like DeepSeek\u2019s are often valued at their \u201cblue-sky potential\u201d rather than as a multiple of revenue, according to tech investor and Corpora.ai CEO Mel Morris. DeepSeek is arguably in the \u201ctop five AI labs in the world right now,\u201d says D.A. Davidson analyst Alexander Platt, adding that it should be worth more to \u201caccount for the research horsepower there which isn\u2019t necessarily monetizable.\u201d<\/p>\n

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Bhatia says $1 billion \u201cseems like a very low number\u201d even after the \u201cChina discount\u201d (due to geopolitical uncertainty since DeepSeek<\/a> is a Chinese company), while Morris pegs DeepSeek\u2019s value at $10 billion. \u201cThere might even be an annoyance factor where someone might actually be prepared to pay that just to take them out of the picture,\u201d he says.<\/p>\n

There\u2019s also the case of DeepSeek\u2019s Chinese competitors\u2014none of which seem to have achieved performance as good as DeepSeek\u2019s, but all of which external investors have valued at $1 billion or more in various funding rounds. DeepSeek hasn\u2019t raised VC funding in part because Liang believes VCs want to \u201cexit and hope to commercialize products as soon as possible,\u201d which didn\u2019t align with DeepSeek\u2019s research priorities, he told Chinese tech outlet 36Kr<\/a> in 2023.<\/p>\n

On top of that, Liang also owns at least 76% of High-Flyer, which has $8 billion in assets according to financial data provider Preqin. Forbes<\/em> values High-Flyer at $240 million, with Liang\u2019s stake worth about $180 million. (Chinese corporate records also show that he owns 85% of another High-Flyer entity that was first registered in 2015 and manages 65 of the firm\u2019s 503 active funds, meaning his equity in the firm could be even higher.) Put it all together and Liang is likely worth at least $1 billion, making him the latest founder to mint a fortune from AI.<\/p>\n

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Got a tip or have additional thoughts? Contact Phoebe Liu at pl**<\/span>@****<\/span>es.com<\/span> or 678.834.4200 on Signal, and Giacomo Tognini at gt******<\/span>@****<\/span>es.com<\/span> or gi****************<\/span>@****<\/span>on.me<\/span>.<\/strong><\/h4>\n
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Not that he likely cares much. \u201cAn exciting thing cannot be measured purely by how much it is worth,\u201d Liang told 36Kr, speaking of DeepSeek and adding how he\u2019d been interested in testing the limits of computing power since 2012. \u201cIt\u2019s like buying a piano for the home. On one hand, you can afford to buy it; on the other, it\u2019s because there\u2019s a group of people eager to make music with it.\u201d Liang and his firm, which are likely closed due to Chinese New Year, did not yet return Forbes\u2019<\/em> requests for comment.<\/p>\n

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L<\/abbr>iang was born in 1985 and grew up in the port city of Zhanjiang in southern China. The son of a primary school teacher, he studied artificial intelligence at Zhejiang University in Hangzhou and got a bachelor\u2019s in electronic engineering in 2006 and a master\u2019s in information and communication engineering four years later.<\/p>\n

While he was still in graduate school, he started exploring how to fully automate trading on China\u2019s domestic stock market. In 2013 he founded his first investment firm, Hangzhou Jacobi\u2014named for German mathematician Carl Jacobi\u2014with his college classmate Xu Jin. Two years later the pair cofounded High-Flyer with another classmate, and the trio used math and AI techniques to build a hedge fund.<\/p>\n

At that point, Liang already had 100 graphics processing units\u2014the high-tech chips that help train AI models\u2014powering High-Flyer\u2019s investment decisions. By 2019, High-Flyer had become one of the largest and best-performing quantitative trading firms in China, and Liang spent nearly $30 million expanding that footprint to 1,100 chips and building his own facilities to house them. He also doubled down on AI, setting up a separate company\u2014Hangzhou High-Flyer AI\u2014to research AI algorithms and their applications and expanded High-Flyer overseas, setting up a fund registered in Hong Kong. The firm has a similar structure to most hedge funds, charging 2% of assets in annual management fees and 20% of profits for its \u201cenhanced funds\u201d while charging a higher profit fee for investors in its quantitative hedging and Hong Kong-based funds.<\/p>\n

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In 2021, as High-Flyer reached a peak of around $14 billion in assets under management\u2014generating an estimated windfall of more than $200 million in management fees for the firm\u2014Liang spent another $155 million to buy 10,000 of Nvidia\u2019s A100 chips. In a 2021 pitch deck for High-Flyer viewed by Forbes<\/em>, the firm revealed it spent 60% of its research funding on its AI lab. That investment came after one of High-Flyer\u2019s best years in 2020, when one of the firm\u2019s earliest and flagship funds\u2014targeting the Chinese CSI 500 stock index\u2014outperformed the index by 50%, posting an annual return of 71% thanks to its use of an AI-powered prediction model that forecast which stocks would perform better. A graph of the firm\u2019s history in the deck showed an upwards-sloping line with a picture of a rocket next to the year 2020, noting that High-Flyer was \u201clooking towards the future.\u201d<\/p>\n

But the funds\u2019 performance started to decline in late 2021, partly due to its AI mistiming trades on the market. High-Flyer closed new subscriptions to its funds in November that year and an executive apologized<\/a> on social media for the poor returns a month later. The firm then put about $55 million of its own cash into its funds in January 2022, and by the end of the year it had recovered, with High-Flyer\u2019s three main funds posting returns higher than 15% compared to a more than 20% loss for the broader market in 2022.<\/p>\n

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Then came DeepSeek. In April 2023 the firm announced in a post on its WeChat account\u2014titled \u201cHigh-Flyer\u2019s New Journey\u201d\u2014that it had established a new firm named DeepSeek to build an artificial general intelligence (AGI) model. Liang funded DeepSeek himself, in part with High-Flyer proceeds, and enlisted his team of mostly new grads from top Chinese universities. Liang was driven by his curiosity to push the boundaries of what AI can do, and not necessarily profit, he told<\/a> 36Kr in 2023.<\/p>\n

Around that time, perhaps realizing DeepSeek\u2019s potential and amid the Chinese government\u2019s regulatory crackdown on quantitative trading, Liang started to scale down High-Flyer to focus on the new firm. In October 2023, a High-Flyer representative told Chinese financial outlet Cailianshe<\/a> that High-Flyer\u2019s business would be divided into two units\u2014artificial intelligence research and the hedge fund\u2014which would be \u201cmanaged by two parallel companies under the same controller,\u201d a reference to Liang. High-Flyer also reduced its scale to about $6 billion in assets under management at the time.<\/p>\n

Last year, as DeepSeek built out its models, High-Flyer adjusted its strategies and abandoned its market-neutral products, which pick both long and short positions on stocks, focusing only on long positions instead. The firm is still active\u2014it invested $35 million of its own cash into its funds in February 2024 and its assets appear to have ticked up again\u2014but its performance last year was middling. Out of 65 High-Flyer funds that report financials, 36 of them showed losses of up to 6% in value in 2024 while another 29 posted gains up to nearly 18%, according to Chinese financial data firm Tonghuashun.<\/a><\/p>\n

Now, all the attention is on DeepSeek. That\u2019s largely thanks to its claims that it trained its V3 model, released in December, with far fewer resources than the much larger OpenAI\u2014$6 million vs. $100 million for GPT-4\u2014and with less sophisticated chips, though the GPT-4 number could include chip and personnel costs. (A few differences in the structure of DeepSeek\u2019s model makes it smaller, and therefore cheaper, while losing minimal accuracy: akin to writing numbers with fewer decimal places, reading in whole phrases at a time instead of word-by-word, and creating a system that divides the model\u2019s knowledge among \u201cexperts,\u201d only a few of which need to be active at a time.) On top of that, it claims that its reasoning model R1, released in January, can rival OpenAI\u2019s \u201co1\u201d model on tasks like coding and solving complex math problems. Notably, unlike those of OpenAI, DeepSeek\u2019s models are open-source, meaning anybody can access the code for free.<\/p>\n

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DeepSeek made \u201cwhat was once thought to be such a capital intensive process much less capital intensive,\u201d says William Blair\u2019s Bhatia.<\/p>\n

For now, DeepSeek\u2019s valuation is a moving and yet-unproven target. It will depend on whether its models continue to be as efficient and advanced going forward and at scale. Plus, with users inputting information into DeepSeek\u2019s models that is \u201cmore sensitive, from a national security standpoint, than anything that ever will appear on TikTok,\u201d it\u2019s unclear how much of the global market DeepSeek will be able to tap into, per Chris Franzek, who leads financial firm Stout\u2019s valuation services. (One of DeepSeek\u2019s Chinese competitors, Zhipu AI, was added to a U.S. Department of Commerce list of foreign companies considered to be a national security risk on January 16, subjecting it to export controls.) Also crucial is how aggressively Liang\u2014who reportedly started DeepSeek without big plans for commercialization\u2014decides to pursue plans for profits.<\/p>\n

\u201cWhat we are thinking now is that we can share most of our training results publicly, so that we can integrate it with commercialization,\u201d Liang said<\/a> in 2023. \u201cWe hope that more people, even a small app, can use the big model at a low cost, rather than having the technology be monopolized by a few people and companies.\u201d<\/p>\n

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MORE FROM FORBES<\/strong><\/h3>\n<\/div>\n

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\n Giacomo Tognini<\/p>\n","protected":false},"excerpt":{"rendered":"

The seemingly overnight success of DeepSeek wiped billions of dollars from the fortunes of the world\u2019s richest people\u2014and catapulted the Chinese AI firm\u2019s founder, Liang Wenfeng, into the three-comma-club. By Giacomo Tognini and Phoebe Liu On January 20, on the same day as Donald Trump\u2019s inauguration in Washington, Chinese premier Li Qiang held a meeting<\/p>\n","protected":false},"author":1,"featured_media":823208,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[141198,118],"tags":[],"class_list":["post-823207","post","type-post","status-publish","format-standard","has-post-thumbnail","category-deepseek","category-inside"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/823207","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=823207"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/823207\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/823208"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=823207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=823207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=823207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}