On Monday, Nvidia Corp. skilled the biggest single-day market cap loss in U.S. historical past, shedding $593 billion, in keeping with Dow Jones Market Knowledge. The set off? A breakthrough attributed to Liang Wenfeng, co-founder of Excessive-Flyer Quant and its AI-focused subsidiary, DeepSeek.
DeepSeek, a cutting-edge AI mannequin, was developed by Excessive-Flyer Quant, considered one of China’s main quantitative buying and selling corporations. Whereas it’s not unusual for Wall Avenue quant veterans to enterprise into expertise, DeepSeek’s rise has been something however extraordinary.
Excessive-Flyer, a serious participant in China’s monetary markets, employs refined algorithms and fashions to execute trades. Its AI lab, DeepSeek, gained world consideration over the weekend by launching its latest mannequin, out there within the U.S. through a smartphone app. By late Sunday, the app had surged to the highest of Apple’s obtain charts. Social media buzzed with comparisons between DeepSeek’s mannequin and choices from Western giants like OpenAI and Anthropic.
DeepSeek’s innovation has been exceptional, competing successfully with high-profile AI fashions whereas working on a fraction of their budgets. The corporate claims to have achieved this with fewer than 10,000 Nvidia A100 GPUs—an assertion met with skepticism by figures like Tesla CEO Elon Musk. This effectivity despatched ripples via the market on Monday, as buyers reconsidered the U.S.’s AI management and Nvidia’s dominance in powering AI developments. Nvidia’s inventory plunged 16.9%, wiping out $588.9 billion in market capitalization.
The upheaval additionally affected shares of Microsoft, Alphabet, and Amazon, as questions arose concerning the sustainability of large AI infrastructure investments. Regardless of a projected $1 trillion in AI spending by U.S. tech giants within the subsequent yr, as forecast by Goldman Sachs strategists, the cost-revenue hole is predicted to hit $600 billion by late 2024, in keeping with Sequoia’s David Cahn.
Who’s Liang Wenfeng?
Born in Guangdong province, Liang studied electronics and laptop imaginative and prescient at Zhejiang College. In 2015, he co-founded Excessive-Flyer with two faculty associates. His rising prominence in China’s AI trade was highlighted by his attendance at a symposium hosted by Premier Li Qiang.
Excessive-Flyer, which reportedly manages $8 billion, initially constructed its AI capabilities with Nvidia chips. Liang is amongst a lineage of finance professionals leveraging quant expertise to innovate in tech, echoing figures like Jeff Bezos, David Siegel, and David E. Shaw, who transitioned between finance and expertise with exceptional success.
The Convergence of Quant and AI
The overlap between quantitative finance and AI analysis is critical. Gareth Shepherd, co-head of Voya Machine Studying Intelligence, famous that methods like reinforcement studying, deep studying, and Bayesian networks are foundational to each fields.
The shift of expertise between finance and AI displays the rising attract of the AI sector. For years, hedge funds had been profitable locations for high tech expertise. Nonetheless, as AI’s significance has grown, firms like OpenAI have begun aggressively hiring, providing aggressive compensation to draw specialists.
Liang’s journey from quant buying and selling to AI exemplifies how aggressive and profitable AI has turn out to be, reshaping industries and difficult assumptions about technological management.