Chinese AI startup DeepSeek, led by billionaire Liang Wenfeng and based in Hangzhou, has prioritized research over revenue, contrasting with Silicon Valley's focus on commercialization. Despite a surge in demand for its services since its January rise to fame with the release of its open 'reasoning' model, R1, DeepSeek has declined investment offers from China's tech giants and venture and state-backed funds, emphasizing model development and the pursuit of artificial general intelligence (AGI) over immediate profits. The company's approach has sparked an AI arms race among Chinese asset managers, significantly impacting China's $10 trillion fund management industry. Firms are expanding their AI research and adopting DeepSeek's technology, driven by its cost-effective AI models and the potential to improve investment performance. DeepSeek's influence extends beyond the fund management sector, with Chinese companies integrating the technology into their products and services, fueled by a sense of patriotism and the ambition to outpace Western competitors in AI adoption. The surge in DeepSeek's popularity has also led to increased orders of NVIDIA H20 AI chips, with major companies like Tencent, Alibaba, and ByteDance ramping up their purchases to support DeepSeek integration. Tencent's order is reportedly worth billions of RMB, with the company acquiring approximately 230,000 NVIDIA chips in 2024, while Microsoft globally purchased around 485,000 AI chips. The rise of DeepSeek has contributed to the outperformance of top Chinese technology stocks, dubbed the 'Seven Titans,' over their American counterparts, the 'Magnificent Seven.' This shift is attributed to DeepSeek's claim of reducing the cost of artificial intelligence, which has spurred a reassessment of Chinese tech stocks by analysts. Tencent's Yuanbao AI chatbot has become the most downloaded iPhone app in China, surpassing DeepSeek, and Alibaba Group has announced a $53 billion investment in AI, using DeepSeek as a benchmark.