DeepSeek's Hedge Fund Owner Had Multiple Top Projects Before Creating The Firm That Fueled $1 Trillion Market Cap Erosion Of AI Stocks

Chinese hedge fund High-Flyer, also known as Hangzhou Huanfang Technology Ltd. Co., founded DeepSeek in 2023 intending to explore artificial general intelligence (AGI), however, much before the AI startup became popular and sent shockwaves through the world of technology, this quantitative fund was involved with several innovations in China.

Top Projects Before DeepSeek

High-Flyer developed its first AI supercomputer “Yinghuo – 1” in 2020, which translates to, Fire-Flyer I, with an approximate investment of 200 million Yuan or $27.44 million, according to ChinaTalk. Deployed in the same year with 1,100 graphic processing units (GPUs), it provided computing power for AI-led research to facilitate quantitative trading.
With an investment of one billion Yuan or $137.204 million, it launched “Yinghuo – 2” or Fire-Flyer II in 2021 which featured around 10,000 Nvidia Corp.’s NVDA A100 GPUs. It also featured cutting-edge hardware and 200 Gbps high-bandwidth connectivity.
After losing over a third of its investors’ money in 2022, dropping from a peak of over $12 billion, as reported by Reuters, the hedge fund announced a shift in strategy. High-Flyer, via its official WeChat account, said that it would focus exclusively on developing AI technology for the benefit of humanity, forming a new independent research group dedicated to exploring the potential of AGI. This restructuring led to the creation of DeepSeek in 2023.

History Of High-Flyer

The company was founded by Liang Wenfeng, Xu Jin, and Zheng Dawei in February 2016 in Ningbo, Zhejiang Province. Relying on mathematics and AI for quantitative investment it took the first stock position by using the deep learning algorithm model and GPUs on Oct. 21, 2016.

Its subsidiaries, Zhejiang High-Flyer Asset Management Co., Ltd., and Ningbo High-Flyer Quant Investment Management Partnership LLP are regulated by the Asset Management Association of China.

The company won the Golden Bull Fund Award for the first time in 2018 and it established High-Flyer Capital Management (Hong Kong) Ltd in 2019, licensed and regulated by the Securities and Futures Commission of Hong Kong.

Wenfeng is now the CEO of DeepSeek, who owns approximately 51% of High-Flyer.

As of December 2024, High-Flyer has assets under management worth $8 billion, as per the report.

What Is A Quantitative Hedge Fund?

Quantitative hedge funds or ‘quant’ funds use sophisticated mathematical models, statistical analysis, and computer algorithms to identify trading opportunities. Relying on data analysis rather than traditional fundamental analysis, they employ strategies like statistical arbitrage, risk parity, and factor investing, using complex computer programs to analyze massive datasets and uncover exploitable market patterns.

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