DeepSeek Accelerates AI Model Timeline as Market Reacts To Low-Cost Breakthrough (reuters.com) 15
Chinese AI startup DeepSeek is speeding up the release of its R2 model following the success of January's R1, which outperformed many US competitors at a fraction of the cost and triggered a $1 trillion-plus market selloff. The Hangzhou-based firm had planned a May release but now wants R2 out "as early as possible," Reuters reported Tuesday.
The upcoming model promises improved coding capabilities and reasoning in multiple languages beyond English. DeepSeek's competitive advantage stems from its parent company High-Flyer's early investment in computing power, including two supercomputing clusters acquired before U.S. export bans on advanced Nvidia chips. The second cluster, Fire-Flyer II, comprised approximately 10,000 Nvidia A100 chips. DeepSeek's cost-efficiency comes from innovative architecture choices like Mixture-of-Experts (MoE) and multihead latent attention (MLA).
According to Bernstein analysts, DeepSeek's pricing was 20-40 times cheaper than OpenAI's equivalent models. The competitive pressure has already forced OpenAI to cut prices and release a scaled-down model, while Google's Gemini has introduced discounted access tiers.
The upcoming model promises improved coding capabilities and reasoning in multiple languages beyond English. DeepSeek's competitive advantage stems from its parent company High-Flyer's early investment in computing power, including two supercomputing clusters acquired before U.S. export bans on advanced Nvidia chips. The second cluster, Fire-Flyer II, comprised approximately 10,000 Nvidia A100 chips. DeepSeek's cost-efficiency comes from innovative architecture choices like Mixture-of-Experts (MoE) and multihead latent attention (MLA).
According to Bernstein analysts, DeepSeek's pricing was 20-40 times cheaper than OpenAI's equivalent models. The competitive pressure has already forced OpenAI to cut prices and release a scaled-down model, while Google's Gemini has introduced discounted access tiers.
Thwey have a small window (Score:2)
They've established themselves and have a small window to gain space before the others catch up.
cheaper or subsidized? (Score:5, Interesting)
"DeepSeek's pricing was 20-40 times cheaper than OpenAI's equivalent models"
I'm wondering if this is because DeepSeek is cheaper to run or because they are offering it for less than it costs them. China has aspects of a command economy, and if a market segment is targeted in the State plan they may pump a lot of money in to make sure it succeeds.
Re: (Score:3, Interesting)
Im pretty sure their costs are lower
If I spend 1 million to download an AI competitors data once a week, where it cost them 500 million to make it, Im doing way better on cost than they are.
Re: (Score:3)
Did those AI engines "steal" their data?
Re: (Score:3)
It is admittedly very funny that OpenAI has complained that these folks are using their model to train DeepSeek's version, when literally all the AI companies are doing just that with content provided by everyone else for free.
Re: (Score:2)
Yeah, heavily subsidized. That could be fixed by applying an equivalent tax.
Re: (Score:2)
What if you subsidize too?
Re: (Score:2)
And if you are pretending you didn't have to buy thousands of chips, you can make it seem even cheaper!
Yeah, heavily subsidized. That could be fixed by applying an equivalent tax.
Question - does the Chines AI need nuclear reactors specifically for it's AI?
As well, is American AI copyrighted, so cannot be used anywhere else? Third question is does the Chines AI cost the multiple Billions the US AI does?
The bubble is getting close to bursting.
Re: (Score:3)
There's a cost associated with training the AI, and then a separate cost involved in generating the inferences from the models.
Generating the inferences can be a significant ongoing compute expense that is usually offset by user fees. What I'm seeing from this article is that DeepSeek's fees are "20-40 times cheaper" than the competition, which seems a little unrealistic.
Re: (Score:2)
C'mon. How much did OpenAI pay for your data online?
Even though there is no definite proof, I am pretty convinced that they indeed used ChatGPT data. Like literally a thousand other models you can download, as many of the open datasets (e.g. on Huggingface) are created using ChatGPT. When the first open source competitors were created, people literally asked ChatGPT to create example content for their datasets. Try out a few models and you'll soon learn to recognize "GPTism". Ever read from a model "Let's d
Re: (Score:2)
The market selloff wasn't as much (Score:3)
as deepseeks model being low energy (which it wasn't, they still had multiple runs and didn't include the training costs associated with massaging the data). But it was the market's realization that AI isn't going to 'go to the moon' forever. Someone is going to figure out how to train models with lower energy costs, and the assumption was its going to take more hardware and more energy, which isn't true in the long run and that isn't how capitalism works. Capitalism favors people that can reduce costs and I think you'd be stupid to believe that its going to be nvidia forever.
Re: (Score:2)
NVIDIA is still going to make lots of money selling hardware either way. This AI stuff is in its toddler phase.
Llama delayed again? (Score:2)
After R1 Meta delayed the planned Llama4 release to catch up. Let's see if they further delay it after R2.