By David Goldman – The new AI model was developed by DeepSeek, a startup that was born just a year ago and has somehow managed a breakthrough that famed tech investor Marc Andreessen has called “AI’s Sputnik moment”: R1 can nearly match the capabilities of its far more famous rivals, including OpenAI’s GPT-4, Meta’s Llama and Google’s Gemini — but at a fraction of the cost.

The company said it had spent just $5.6 million powering its base AI model, compared with the hundreds of millions, if not billions of dollars US companies spend on their AI technologies. That’s even more shocking when considering that the United States has worked for years to restrict the supply of high-power AI chips to China, citing national security concerns. That means DeepSeek was supposedly able to achieve its low-cost model on relatively under-powered AI chips.

The company, founded in late 2023 by Chinese hedge fund manager Liang Wenfeng, is one of scores of startups that have popped up in recent years seeking big investment to ride the massive AI wave that has taken the tech industry to new heights.

Liang has become the Sam Altman of China — an evangelist for AI technology and investment in new research. His hedge fund, High-Flyer, focuses on AI development.  Read On: