"They can take a really good, big model and use a process called distillation," said Benchmark General Partner Chetan Puttagunta. "Basically you use a very large model to help your small model get smart at the thing you want it to get smart at. That's actually very cost-efficient."
Little is known about the lab and its founder, Liang WenFeng. DeepSeek was was born of a Chinese hedge fund called High-Flyer Quant that manages about $8 billion in assets, according to media reports.
But DeepSeek isn't the only Chinese company making inroads.