The past few weeks in the AI ecosystem have been nothing short of thrilling, as China and the US continue their fierce competition for AI dominance.
If you have not heard yet, a new Chinese startup has launched a large language model (LLM) that rivals if not surpasses the top-tier models from OpenAI, Meta, Anthropic, and Google.
Why is this new model such a game-changer, and how can your business leverage it right now? In this article, I will break down everything you need to know about this groundbreaking innovation from China, its implications for the AI ecosystem, and how you can unlock its immense value for your business.
What is DeepSeek?
DeepSeek is a Chinese AI company dedicated to researching and developing high-end, open-source AI models. Founded in 2023 by Liang Wenfeng, a hedge fund manager who also runs High Flyer, an $8 billion hedge fund based in China, DeepSeek began as a side project.
- High Flyer initially used AI for market predictions and investment strategies, but Liang saw an opportunity to expand into building cutting-edge AI models.
- Despite facing significant challenges such as limited access to state-of-the-art AI GPUs due to US export restrictions, DeepSeek managed to train its flagship AI model using just 2,000 low-grade NVIDIA H800 GPUs.
- According to their research paper, the training compute cost was approximately $6 million, a big contrast to the $500 million reportedly spent to train OpenAI’s o1 models.
- What’s even more impressive is that DeepSeek delivered this model at a fraction of the cost and faster than its competitors.
As of today, the DeepSeek R1 model outperforms OpenAI’s leading model, o1, on Coding and MATH-500 benchmarks, as shown on the AI model leaderboard by ArtificialAnalysis.
Cost Efficiency and Performance
DeepSeek’s R1 model is not just powerful, it is also incredibly affordable. While OpenAI’s o1 Model API costs $15 per mTok for input tokens and $60 per mTok for output tokens, DeepSeek’s R1 is priced at just $0.55 per mTok for input tokens and $2.19 per mTok for output tokens. That is a staggering 96% price reduction for the same or even better performance.
What This Means For Your Business
With such a cost-effective yet powerful reasoning model like DeepSeek’s R1, the opportunities for your business are immense.
Companies can integrate this model to enhance their AI assistants and agents, benefiting from reduced hallucinations, faster response times, and more advanced insights from their data. The model’s ability to self-check and correct itself makes it ideal for handling complex, agentic scenarios.
You can start using DeepSeek’s models today via their chat console at chat.deepseek.com. For API access, visit platform.deepseek.com to create an account and integrate it into your existing AI solutions. If you are already using OpenAI’s APIs, switching to DeepSeek is seamless, simply update the API endpoint URL and key, as DeepSeek’s APIs are fully compatible with OpenAI’s specifications.
Things To Note
While DeepSeek’s models offer incredible value at a low cost, it is important to be aware of some considerations. DeepSeek’s privacy policy and terms of use state that the information provided on their platform may be used to enhance and train their services. While this is not a blocker, it is worth keeping in mind depending on your use case, especially for more data-sensitive scenarios.
For businesses with highly sensitive data, DeepSeek has also released smaller, distilled versions of the R1 model that can be run on a local computer within your enterprise using a quantized version of the model on Ollama and AnythingLLM. However, for most use cases, the publicly available version should suffice.
Good luck, and Happy AI Transformation!
