Math whiz Liang Wenfeng of Deepseek shakes up the Big Tech world with innovative ideas
On the fateful day of Donald Trump's presidential inauguration, Chinese premier Li Keqiang huddled with experts to strategize on the government's forthcoming policies. This low-key event, as Forbes notes, garnered little attention outside of China. One of the few voices to chime in was Liang Wenfeng, a specs-wearing hedge-fund founder and AI guru whose firm, DeepSeek, had recently unveiled its groundbreaking R1 model. It took little over a week for this math genius to go from obscurity to disrupting the global stage, becoming, as the Financial Times dubs him, "the enigmatic chap who stirred an existential panic in Silicon Valley."
Passion Fuels Liang Wenfeng
By all accounts, Liang was caught off guard by the ensuing stock market upheaval, which more or less evaporated a trillion dollars from US tech stocks. Today, DeepSeek boasts a staggering valuation of at least $1 billion (a recent funding round values its American rival, OpenAI, at over $300 billion), and Liang owns a whopping 84% of his Hangzhou-based firm. Money, however, isn't the prime motivator for the man. As he told Chinese media company 36Kr in 2023, excitement isn't solely measured by net worth. He's been fascinated by the limits of computational powers since 2012 and compared the pursuit of sought-after Nvidia chips to buying a piano—something you get for being able to afford it and to play music on it with a group of eager friends.
In recent days, Liang has been compared to China's Sam Altman. But a more accurate likeness would be that of Jim Simons, the US quantitative investment pioneer whose Renaissance Technologies fund has been leveraging machine-learning techniques since the 1980s. Liang himself penned a preface to the Chinese version of Gregory Zuckerman's The Man Who Solved The Market, delving into Simons' launch of the Quant revolution. Liang's move towards AI with the establishment of DeepSeek in 2023 was a natural progression of sorts.
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Born in 1985, Liang earned his electronic engineering degree from Zhejiang University before devising AI algorithms as a student to select stocks. After graduation, he laid the groundwork for investment firm Jacobi before teaming up with two college chums in 2015 to create High-Flyer. Unlike the founders of most Chinese quant funds, none of them claimed credentials in overseas or institutional trading[1].
"A Digital David vs. America's Silicon Valley titan"
The trio experimented with diverse strategies, from discretionary trading to arbitrage, before settling on a systematic approach. They designed a tool to pinpoint non-linear links between market factors and incorporating machine learning into High-Flyer's products. This method helped High-Flyer's funds return more than 20% compared to market benchmarks, and incremented assets under management to over ¥90 billion (roughly £10 billion) by 2021[1].
The road hasn't been smooth-sailing, however. In 2021, High-Flyer admitted falling short of investor expectations and shouldering the blame for suboptimal performance[3]. Two years later, the firm faced the wrath of Chinese regulators who accused quants of amplifying market volatility[2]. Yet Liang received a hero's welcome in his hometown during the Lunar New Year celebration of 2023, an acknowledgement of his triumph against the mighty US tech giants and a local success story. Despite Liang's reluctance to seek the limelight, given the fate of other high-profile Chinese CEOs who shone too brightly[4], he's managed to win the respect of the US-led tech world.
In the world of business and finance, Liang Wenfeng, a Chinese AI guru, has disrupted the global stage with his technology-driven firm, DeepSeek. Despite his staggering success and a net worth that rivals Silicon Valley titans, Liang remains passionate about the limits of computational powers, likening his pursuit to the joy of playing music on a piano.
