Naive algorithm: $2n^3 =$ $\mathcal{O}(n^3)$ operations.
However, $2n^2$ of input data, $n^2$ of output. Maybe there exists $\mathcal{O}(n^2)$ algorithm (not proven or disproven).
Strassen gives $\mathcal{O}(n^{2.807\dots})$ - sometimes used in practice
World record $\mathcal{O}(n^{2.37\dots})$ - big constant, not practical
Let $A$ and $B$ be two $2\times 2$ matrices. Naive multiplication $C = AB$ $$ \begin{bmatrix} c_{11} & c_{12} \\ c_{21} & c_{22} \end{bmatrix} = \begin{bmatrix} a_{11} & a_{12} \\ a_{21} & a_{22} \end{bmatrix} \begin{bmatrix} b_{11} & b_{12} \\ b_{21} & b_{22} \end{bmatrix} = \begin{bmatrix} a_{11}b_{11} + a_{12}b_{21} & a_{11}b_{21} + a_{12}b_{22} \\ a_{21}b_{11} + a_{22}b_{21} & a_{21}b_{21} + a_{22}b_{22} \end{bmatrix} $$ contains $8$ multiplications and $4$ additions.
In the work Gaussian elimination is not optimal (1969) Strassen found that one can calculate $C$ using 18 additions and only 7 multiplications: $$ \begin{split} c_{11} &= f_1 + f_4 - f_5 + f_7, \\ c_{12} &= f_3 + f_5, \\ c_{21} &= f_2 + f_4, \\ c_{22} &= f_1 - f_2 + f_3 + f_6, \end{split} $$ where $$ \begin{split} f_1 &= (a_{11} + a_{22}) (b_{11} + b_{22}), \\ f_2 &= (a_{21} + a_{22}) b_{11}, \\ f_3 &= a_{11} (b_{12} - b_{22}), \\ f_4 &= a_{22} (b_{21} - b_{11}), \\ f_5 &= (a_{11} + a_{12}) b_{22}, \\ f_6 &= (a_{21} - a_{11}) (b_{11} + b_{12}), \\ f_7 &= (a_{12} - a_{22}) (b_{21} + b_{22}). \end{split} $$
Fortunately, these formulas hold even if $a_{ij}$ and $b_{ij}$, $i,j=1,2$ are block matrices.
Thus, Strassen algorithm looks as follows. First of all we split matrices $A$ and $B$ of sizes $n\times n$, $n=2^d$ into 4 blocks of size $\frac{n}{2}\times \frac{n}{2}$. Then we calculate multiplications in the described formulas recursively. This leads us again to the divide and conquer idea.
Calculation of number of multiplications is a trivial task. Let us denote by $M(n)$ number of multiplications used to multiply 2 matrices of sizes $n\times n$ using the divide and conquer concept. Then for naive algorithm we have $$ M_\text{naive}(n) = 8 M_\text{naive}\left(\frac{n}{2} \right) = 8^2 M_\text{naive}\left(\frac{n}{4} \right) = \dots = 8^{d-1} M(1) = 8^{d} = 8^{\log_2 n} = n^{\log_2 8} = n^3 $$ So, even when using divide and coquer idea we can not be better than $n^3$.
Lets calculate number of multiplications for the Strassen algorithm: $$ M_\text{strassen}(n) = 7 M_\text{strassen}\left(\frac{n}{2} \right) = 7^2 M_\text{strassen}\left(\frac{n}{4} \right) = \dots = 7^{d-1} M(1) = 7^{d} = 7^{\log_2 n} = n^{\log_2 7} $$
There is no point to estimate number of addtitions $A(n)$ for naive algorithm, as we already got $n^3$ multiplications. For the Strassen algorithm we have: $$ A_\text{strassen}(n) = 7 A_\text{strassen}\left( \frac{n}{2} \right) + 18 \left( \frac{n}{2} \right)^2 $$ since on the first level we have to add $\frac{n}{2}\times \frac{n}{2}$ matrices 18 times and then go deeper for each of the 7 multiplications. Thus, $$ \begin{split} A_\text{strassen}(n) =& 7 A_\text{strassen}\left( \frac{n}{2} \right) + 18 \left( \frac{n}{2} \right)^2 = 7 \left(7 A_\text{strassen}\left( \frac{n}{4} \right) + 18 \left( \frac{n}{4} \right)^2 \right) + 18 \left( \frac{n}{2} \right)^2 = 7^2 A_\text{strassen}\left( \frac{n}{4} \right) + 7\cdot 18 \left( \frac{n}{4} \right)^2 + 18 \left( \frac{n}{2} \right)^2 = \\ =& \dots = 18 \sum_{k=1}^d 7^{k-1} \left( \frac{n}{2^k} \right)^2 = \frac{18}{4} n^2 \sum_{k=1}^d \left(\frac{7}{4} \right)^{k-1} = \frac{18}{4} n^2 \frac{\left(\frac{7}{4} \right)^d - 1}{\frac{7}{4} - 1} = 6 n^2 \left( \left(\frac{7}{4} \right)^d - 1\right) \leqslant 6 n^2 \left(\frac{7}{4} \right)^d = 6 n^{\log_2 7} \end{split} $$ (since $4^d = n^2$ and $7^d = n^{\log_2 7}$).
Asymptotic behavior of $A(n)$ could be also found from the master theorem.
Total complexity is $M_\text{strassen}(n) + A_\text{strassen}(n)=$ $7 n^{\log_2 7}$. Strassen algorithm becomes faster when $$ \begin{split} 2n^3 &> 7 n^{\log_2 7}, \\ n &> 667, \end{split} $$ so it is not a good idea to get to the bottom level of recursion.
It is not clear how Strassen found these formulas. However, now we can see that they are not that artificial: there is a general approach based on the so-called tensor decomposition technique. Here by tensor we imply nothing, but a multidimensional array - generalization of the matrix concept to many dimensions.
Let us numerate elements in the $2\times 2$ matrices as follows $$ \begin{bmatrix} c_{1} & c_{3} \\ c_{2} & c_{4} \end{bmatrix} = \begin{bmatrix} a_{1} & a_{3} \\ a_{2} & a_{4} \end{bmatrix} \begin{bmatrix} b_{1} & b_{3} \\ b_{2} & b_{4} \end{bmatrix}= \begin{bmatrix} a_{1}b_{1} + a_{3}b_{2} & a_{1}b_{3} + a_{3}b_{4} \\ a_{2}b_{1} + a_{4}b_{2} & a_{2}b_{3} + a_{4}b_{4} \end{bmatrix} $$
This can be written as $$ c_k = \sum_{i=1}^4 \sum_{j=1}^4 x_{ijk} a_i b_j, \quad k=1,2,3,4 $$ where $x_{ijk}$ is a 3-dimensional array, that consists of zeros and ones: $$ \begin{split} x_{\ :,\ :,\ 1} = \begin{pmatrix} 1 & 0 & 0 & 0 \\ 0 & 0 & 0 & 0 \\ 0 & 1 & 0 & 0 \\ 0 & 0 & 0 & 0 \\ \end{pmatrix} \quad x_{\ :,\ :,\ 2} = \begin{pmatrix} 0 & 0 & 0 & 0 \\ 1 & 0 & 0 & 0 \\ 0 & 0 & 0 & 0 \\ 0 & 1 & 0 & 0 \\ \end{pmatrix} \\ x_{\ :,\ :,\ 3} = \begin{pmatrix} 0 & 0 & 1 & 0 \\ 0 & 0 & 0 & 0 \\ 0 & 0 & 0 & 1 \\ 0 & 0 & 0 & 0 \\ \end{pmatrix} \quad x_{\ :,\ :,\ 4} = \begin{pmatrix} 0 & 0 & 1 & 0 \\ 0 & 0 & 0 & 0 \\ 0 & 0 & 0 & 0 \\ 0 & 0 & 0 & 1 \\ \end{pmatrix} \end{split} $$
To get Strassen algorithm we should do the following trick - decompose $x_{ijk}$ in the following way $$ x_{ijk} = \sum_{\alpha=1}^r u_{i\alpha} v_{j\alpha} w_{k\alpha}. $$ This decomposition is called trilinear tensor decomposition and has a meaning of separation of variables: we have a sum of $r$ (called rank) summands with separated $i$, $j$ and $k$.
Now we have $$ c_k = \sum_{\alpha=1}^r w_{k\alpha} \left(\sum_{i=1}^4 u_{i\alpha} a_i \right) \left( \sum_{j=1}^4 v_{j\alpha} b_j\right), \quad k=1,2,3,4. $$ Multiplications by $u_{i\alpha}$ or $v_{j\alpha}$ or $w_{k\alpha}$ do not require recursion since $u, v$ and $w$ are known precomputed matrices. Therefore, we have only $r$ multiplications of $\left(\sum_{i=1}^4 u_{i\alpha} a_i \right)$ and $\left( \sum_{j=1}^4 v_{j\alpha} b_j\right)$ where both factors depend on the input data.
As you might guess one can check that array $x_{ijk}$ has rank $r=7$, which leads us to $7$ multiplications and to the Strassen algorithm!