Unconventional Wisdom

Context

DeepSeek, the groundbreaking Chinese AI startup founded by Liang Wenfeng in 2023, is celebrated today for its audacious approach to AI development.

When it unveiled a high-performance AI model for under US$6m, DeepSeek sent shockwaves through the tech industry, proving that cutting-edge AI need not come with a billion-dollar price tag. It had pulled off what many thought impossible – creating an advanced AI model at a relatively low cost.

However, Liang’s early journey was anything but smooth.

Real-Life Story

Liang’s colleagues dismissed his AI ambitions as little more than a pipe dream. Business partners scoffed at the idea, convinced that only tech giants had the muscle to pull off such an audacious feat. One sceptic even remarked that Liang couldn’t articulate his vision beyond insisting it would be a “game-changer” – a claim that, without proof, sounded more like wishful thinking than a blueprint for disruption.

The startup began life as a lonely gamble, funded solely by Liang’s hedge fund with not a single yuan of external investment. Adding to the scepticism, DeepSeek lacked a clear commercial roadmap, making it a hard sell in a market where investors expect immediate monetisation strategies.

DeepSeek’s biggest battle was not just against market doubt but against a far more formidable obstacle – access to computing power. Compared to its well-funded US counterparts, it was fighting with one hand tied behind its back. It needed twice the computing power to achieve the same results, Liang admitted.

Then came the hammer blow: US export controls on advanced Nvidia AI chips. The restrictions threatened to cripple the company before it could even take off. But Liang was no stranger to high-stakes bets. Before the noose tightened, he stockpiled between 10,000 and 50,000 A100 chips, ensuring DeepSeek had the firepower to keep its AI ambitions alive.

The chip embargo became the company’s biggest hurdle, but also its greatest motivator.

While others saw roadblocks, Liang saw a challenge to outthink, outmanoeuvre, and out-engineer the system. Instead of lamenting over limited computing resources, he turned the constraint into an advantage, pushing his team to develop a more efficient AI model that delivered results at a fraction of the cost.

PostScript: DeepSeek’s strategy wasn’t just about building AI; it was a bold statement that US technological restrictions could be outflanked. By developing a state-of-the-art AI model for just $5m to $6m – a fraction of what Western firms spend – DeepSeek not only proved its efficiency but also challenged the very effectiveness of the export controls. Some analysts even speculated that the perfectly timed breakthrough was as much a political statement as it was a technological triumph.

Key Lessons

1) Defy Conventional Wisdom

When everyone dismissed DeepSeek’s ambitions as a pipe dream, Liang Wenfeng pressed on. WarTime CEOs trust their instincts and challenge industry norms, even when experts say it can’t be done.

2) Bet on Yourself

With no external investors, DeepSeek was built on Liang’s personal funds. In high-stakes battles, WarTime CEOs are willing to put skin in the game and take calculated risks without waiting for external validation.

3) Turn Constraints into Catalysts  

Limited computing power and export restrictions could have crippled DeepSeek, but they became the driving force for innovation. A WarTime CEO doesn’t complain about constraints – they use them to sharpen their competitive edge.

4) Outthink, Outmanoeuvre, Outlast 

DeepSeek’s survival hinged on strategic foresight – stockpiling Nvidia chips before sanctions tightened. WarTime CEOs anticipate obstacles before they arise and stay three moves ahead of the competition.

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Until next week, may the force be with you.

Kevin

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