Why DeepSeek is CRUSHING OpenAI
Inside secrets why OpenAI is freaking out right now
DeepSeek R1 from China is about as good as ChatGPT 01 (the “thinking” model)
DeepSeek R1 is slightly better than ChatGPT 01 in some ways, and slightly worse in others.
This fact is already shocking — but it’s not even the most important news.
The most important is the fact that DeepSeek cost only 6 million USD to create!
GPT-4 on the other hand cost about 80 million USD to train.
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Why does this matter?
DeepSeek was not only cheap to create, but it is also cheap to run.
This is why DeepSeek is completely free for regular users.
If you want to use the DeepSeek API to build an AI application, it is about 27X cheaper than using ChatGPT — 01
This completely destroys OpenAI’s business model.
Why pay $20 or $200 USD per month to OpenAI when you can get the same quality service for free?
Why use the OpenAI API when DeepSeek’s is just as good and costs 27X less?
Did the US Government make a huge mistake with the chip sanctions?
China and the USA are in an “AI race”.
The US wants to with this race so badly that they put sanctions on the best AI chips from Nvidia (The H100)
Because China can’t use the best AI chips, they had to figure out how to work with the Nvidia H800 (the best AI chip that China is allowed to buy — but still far worse than the H100).
It is said that “necessity is the mother of invention”.
Because the Chinese researchers were dealing with lower-quality chips than the Americans, they needed to think outside the box and create more efficient ways to train and run their large language models.
Surprisingly, they exceeded expectations.
This huge breakthrough with DeepSeek is so efficient and so good that it looks like the US sanctions may have backfired.
OpenAI is freaking out because they fear that whatever new model or capability they put out to the world, China will be able to reverse engineer it — and make it far cheaper within a couple of months.
Imagine knowing that whatever invention you make, a competitor will be able to make the same thing 2 months later, for 5% of the price you can make it for.
This is basically what OpenAI and ChatGPT are dealing with right now.
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well, openAI has built trust and brand reliability. so if DeepSeek can keep up with that, it might push OpenAI to rethink its pricing model and overall approach.