Why Is The Tech Industry Freaking Out About 'DeepSeek'? Memes About A Chinese AI Company And Its LLM Edging Out Silicon Valley Explained

Tech Twitter is seeing some major infighting this week over DeepSeek and DeepSeek-R1, a Chinese AI company and its large-language model (LLM) that just shot to the top of the Apple App Store.

The tech world largely seems to be split into two factions amid the artificial intelligence's release: team "Chinese tech is sus" and team "Silicon Valley is a bubble waiting to pop."

One side is side-eyeing DeepSeek like it's a CCP-funded psyop solely created to undercut the U.S. tech market, while the other is gleefully cheering for an underdog that might finally humble big players like Sam Altman's OpenAI and its well-known products like GPT and ChatGPT.

So, what is DeepSeek, why is DeepSeek-R1 causing stocks to drop today and why is it causing so much drama online? Let's explain the memes and reactions making the rounds on the internet lately.

What Is DeepSeek, And Why Are People Calling It A 'Side Project'?

DeepSeek was born out of the Chinese quant hedge fund "High-Flyer," headed by Chinese entrepreneur and businessman Liang Wenfeng. Quant hedge funds are, in tech commentator @hxiao's words, "lean and mean," and High Flyer was no exception.

DeepSeek purportedly began as a result of High Flyer's leftover GPU (graphics processing unit or graphics card) capacities, which were redirected away from market predictions and toward an LLM model.

DeepSeek quietly dropped its V3 version in December 2024, a model not unlike ChatGPT-4o and Claude 3.5 Sonnet, regarded by many as two of the biggest and best chatbots available on the market today.

However, the artificial intelligence company did not make waves in the AI community until January 20th, 2025, when it released DeepSeek-R1, an open-source model it says is designed for logical inference, mathematical reasoning and real-time problem-solving. According to many, the tool proved to be at par with similar tools put out by OpenAI but at a fraction of the cost.

Why Is Tech Twitter Arguing Over DeepSeek, And What Are The Two Major Factions Forming?

The release of DeepSeek's V3 model, supposedly developed with a budget of just $5.6 million, has reportedly caused significant concern within Meta's AI division, as well as recent dips in the stock market.

An anonymous post on Team Blind, a forum for verified tech professionals, claimed that Meta's AI department is feeling the pressure from DeepSeek's efficient approach. The post stated, "Engineers are moving frantically to dissect DeepSeek and copy anything and everything we can from it. I'm not even exaggerating."

But it's not just Meta AI, tech Twitter at large is in shambles after DeepSeek dropped this past week, and the drama boils down to two major factions: those who think that the AI bubble is going to pop and those who are crying "CCP-funded psyop."

Many critics are arguing that DeepSeek’s roots in China raise (literal) red flags, such as censorship. Viral videos show the AI dodging questions about Chinese President Xi Jinping, while rumors swirled that DeepSeek smuggled more NVIDIA chips into China or even "stole" OpenAI's code.

DeepSeek censors its own response in realtime as soon as Xi Jinping is mentioned pic.twitter.com/Nb2ylRXERG

— Jane Manchun Wong (@wongmjane) January 24, 2025

Meanwhile, tech entrepreneurs like Neal Khosla, whose father owns a majority stake in OpenAI, doubled down on warnings about DeepSeek being a "Trojan horse" for more nefarious tech.

Other tech entrepreneurs like Scale AI CEO Alexandr Wang are speculating that DeepSeek is secretly using "50,000 NVIDIA H100s" (a type of GPU designed specifically for AI applications) that the company somehow smuggled into China.

Billionaire and Scale AI CEO Alexandr Wang: DeepSeek has about 50,000 NVIDIA H100s that they can't talk about because of the US export controls that are in place. pic.twitter.com/J8ZIXwS2Ja

— Chubby♨️ (@kimmonismus) January 24, 2025

But not everyone was inherently wary about DeepSeek, with many tech workers citing the tool's open-source technology (as opposed to OpenAI and Claude's closed models) as a sign that the AI industry is finally getting the push it needs to innovate instead of further monopolizing.

Moreover, many people priced out of OpenAI's stronger computing tiers took DeepSeek's shocking affordable pricing as a sign that the Silicon Valley tech bubble might finally be ready to pop.

Still, DeepSeek's censorship guidelines seem to be a major sticking point for a lot of American tech professionals who have a hard time trusting a reasoning model that can't bring itself to talk about Tiananmen Square, among other things.

Deep seek interesting prompt byu/panamasian_14 inChatGPT

What Are The Memes People Are Sharing About The DeepSeek Drama?

Many of the memes around DeepSeek-R1 come from American tech workers joking about the AI company "stealing" OpenAI's code, as seen in a meme posted by X user @Andr3jH that read, "OpenAI engineers browsing the 'our team' section of the DeepSeek website and recognizing their ex-girlfriends."

Major tech venture capitalist (VC) Marc Andreeson also weighed in on the DeepSeek release, congratulating the team before posting a meme about all the tech infighting over the LLM.

Others joked about how DeepSeek's release may have just dashed Sam Altman's dream of accruing massive, "generational" wealth.

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For the full history of DeepSeek, be sure to check out Know Your Meme's encyclopedia entry for more information.