DeepSeek Disrupts AI Market with Low-Cost, High-Performance Model

DeepSeek dims shine of AI stars

China-based DeepSeek shook up the world of generative artificial intelligence (GenAI) early this year with a low-cost but high-performance model that challenges the hegemony of OpenAI and other big-spending behemoths. Since late 2022, just a handful of AI assistants -- such as OpenAI's ChatGPT, Anthropic's Claude, and Google's Gemini -- have reigned supreme, becoming ever more capable thanks to multi-billion-dollar investments in engineers, data centers, and high-performance AI chips. But then DeepSeek upended the sector with its R1 model, which it said cost just $6 million or so, powered by less-advanced chips. While specialists suspect DeepSeek may have cost more than its creators claim, its debut fueled talk that GenAI assistants are becoming just a regular commodity, thanks to innovation and market forces. "The first company to train models must expend lots of resources to get there," said CFRA senior equity analyst Angelo Zino. "The second mover can get there cheaper and more quickly." At a HumanX AI conference in Las Vegas this week, Hugging Face co-founder Thomas Wolf said it is getting less expensive to launch GenAI models -- and less important which one people use. "I feel like we are moving to this multi-model world, which is a good thing," Wolf said, pointing to the muted reception given to the most recent version of ChatGPT. Stay flexible At the conference, OpenAI chief product officer Kevin Weil pushed back against the notion that all models are created equal. "That's actually not true," Weil said. "The days of us having a 12-month lead are probably gone, but I think we have a three- to six-month lead, and that is really valuable." Weil said OpenAI plans to fight to keep that narrowing edge over its competitors. With 400 million users, San Francisco-based OpenAI has the advantage of being able to use data from massive traffic to continually improve its models, Weil explained. "OpenAI has the Google advantage of being the thing that's in everybody's minds," said Alpha Edison equity firm research director Fen Zhao. Jeff Seibert, chief of the accounting and AI start-up Digits, agreed that OpenAI will stay ahead of the pack but added that he expects the gap to eventually close. "For advanced use cases, yes, there will be a lot of advantages," he said of OpenAI's position. "But for a lot of stuff, it won't matter as much." Seibert advises entrepreneurs to design their technology to allow them to swap out GenAI models, affording them flexibility in a quickly changing industry. Cash burn Improved use of chips and new optimization techniques have driven down the cost of designing the large language models (LLMs) that power ChatGPT, Gemini and their rivals. An open-source approach taken by some LLMs is credited with helping accelerate innovation by making the software free for anyone to tinker with and improve. The valuation of closed-model startups such as Anthropic and OpenAI has likely peaked as their "first-mover advantage dissipates," according to Zino. Japanese investment colossus SoftBank pumped $40 billion into OpenAI in February in a deal that valued the startup at $300 billion -- almost double what it was last year. "If you're burning a billion dollars a month, which I think OpenAI is, you have to keep raising money," said Jai Das of private equity firm Sapphire Ventures. "I have a hard time seeing how they get to a point where revenues are higher than the amount of cash they burn." Anthropic raised $3.5 billion in early March, valuing the champion of responsible AI at $61.5 billion.

Generative AI rivals racing to the future

Las Vegas (AFP) - Since ChatGPT burst onto the scene in late 2022, generative artificial intelligence (GenAI) models have been vying for the lead - with the US and China hotbeds for the technology. GenAI tools are able to create images, videos, or written works as well as answer questions or tend to online tasks based on simple prompts. These AI assistants stand out for their popularity and sophistication. Hot ChatGPT AI existed before ChatGPT, but it was first to make GenAI freely available for people to use as a dedicated application. San Francisco-based OpenAI has made ChatGPT more powerful and capable with each update, the most recent being GPT 4.5. One version of ChatGPT released late last year, called o1, was touted as a new-generation that takes time to ponder answers, providing comprehensive results and less inclined to err. Instead of instantly cranking out results, the model shares its "chain of thought". OpenAI has imbued ChatGPT with the ability to act as a digital "agent" capable of browsing the internet, compiling information and using computers the way people do when working on tasks. Google Gemini Google has long put AI to work behind the scenes at its platform but cranked out Bard to take on ChatGPT in March of 2023. Bard was gradually replaced by a more advanced Gemini model built into Pixel phones and more. The Internet giant integrated Gemini into its famous search engine to display results summaries called "AI Overviews" along with links in response to queries. Google also put AI to work letting people search using pictures, video, or sound instead of just typed words. Such "multimodal" input capability has become common in GenAI tools. A Gemini 2.0 model capable of "step-by-step" reasoning made its debut in February of this year. Cautious Claude Founded by former OpenAI engineers, Anthropic launched Claude in March 2023. The San Francisco-based startup stresses responsible development of AI, moving more cautiously than competitors as it innovates. Anthropic unveiled Claude 3.7 Sonnet in February, its first model combining instant responses and thoughtful reasoning. Claude was previously enhanced with a "computer use" feature that let the AI independently perform computer tasks as a person might. Mighty Meta Meta has integrated custom AI into Facebook, Instagram, Threads, WhatsApp, Messenger and its Ray-Ban connected glasses with the aim of making it the most widely used digital assistant in the world. Meta's chatbot is based on the tech firm's open-source Llama model, considered one of the most powerful in the world. Recent press reports tell of plans by the Silicon Valley titan to release MetaAI as a stand-alone application in a direct challenge to OpenAI and Google. Grok Snark A co-founder of OpenAI, Elon Musk cut ties with the startup in 2018. Since ChatGPT took the lead in the GenAI race, Musk has sued OpenAI, offered to buy it, and launched a rival named xAI. Musk's chatbot Grok has the advantage of being able to use the trove of posts at X, formerly Twitter, for training the AI model. The Tesla tycoon bought Twitter in late 2022. Musk made up for lost time by spending billions of dollars on high-end Nvidia chips for powering AI datacenters. He promotes Grok as a chatbot with personality, humor and fewer constraints on what it produces. Upstart DeepSeek DeepSeek was founded in 2023 by Chinese investment fund High-Flyer. In January 2025, the Hangzhou-based start-up turned the world of generative AI upside down with its R1 model. DeepSeek claims the AI tool was built using less sophisticated chips than its competitors, slashing the cost. The application was downloaded tens of millions of times in just a few weeks. Mounting mix Chinese tech behemoths Tencent (Yuanbao), Baidu (Ernie) and ByteDance (Doubao) are also vying for position in the AI market. In early March, Alibaba released its QwQ-32B model, which it claims matches the performance of DeepSeek-R1. France-based Mistral early last year released Le Chat, AI software particularly advanced in document and image analysis.

DeepSeek dims shine of AI stars

Las Vegas (AFP) - China-based DeepSeek shook up the world of generative artificial intelligence (GenAI) early this year with a low-cost but high-performance model that challenges the hegemony of OpenAI and other big-spending behemoths. Since late 2022, just a handful of AI assistants -- such as OpenAI's ChatGPT, Anthropic's Claude, and Google's Gemini -- have reigned supreme, becoming ever more capable thanks to multi-billion-dollar investments in engineers, data centers, and high-performance AI chips. But then DeepSeek upended the sector with its R1 model, which it said cost just $6 million or so, powered by less-advanced chips. While specialists suspect DeepSeek may have cost more than its creators claim, its debut fueled talk that GenAI assistants are becoming just a regular commodity, thanks to innovation and market forces. "The first company to train models must expend lots of resources to get there," said CFRA senior equity analyst Angelo Zino. "The second mover can get there cheaper and more quickly." At a HumanX AI conference in Las Vegas this week, Hugging Face co-founder Thomas Wolf said it is getting less expensive to launch GenAI models -- and less important which one people use. "I feel like we are moving to this multi-model world, which is a good thing," Wolf said, pointing to the muted reception given to the most recent version of ChatGPT. Stay flexible At the conference, OpenAI chief product officer Kevin Weil pushed back against the notion that all models are created equal. "That's actually not true," Weil said. "The days of us having a 12-month lead are probably gone, but I think we have a three- to six-month lead, and that is really valuable." Weil said OpenAI plans to fight to keep that narrowing edge over its competitors. With 400 million users, San Francisco-based OpenAI has the advantage of being able to use data from massive traffic to continually improve its models, Weil explained. "OpenAI has the Google advantage of being the thing that's in everybody's minds," said Alpha Edison equity firm research director Fen Zhao. Jeff Seibert, chief of the accounting and AI start-up Digits, agreed that OpenAI will stay ahead of the pack but added that he expects the gap to eventually close. "For advanced use cases, yes, there will be a lot of advantages," he said of OpenAI's position. "But for a lot of stuff, it won't matter as much." Seibert advises entrepreneurs to design their technology to allow them to swap out GenAI models, affording them flexibility in a quickly changing industry. Cash burn Improved use of chips and new optimization techniques have driven down the cost of designing the large language models (LLMs) that power ChatGPT, Gemini and their rivals. An open-source approach taken by some LLMs is credited with helping accelerate innovation by making the software free for anyone to tinker with and improve. The valuation of closed-model startups such as Anthropic and OpenAI has likely peaked as their "first-mover advantage dissipates," according to Zino. Japanese investment colossus SoftBank pumped $40 billion into OpenAI in February in a deal that valued the startup at $300 billion -- almost double what it was last year. "If you're burning a billion dollars a month, which I think OpenAI is, you have to keep raising money," said Jai Das of private equity firm Sapphire Ventures. "I have a hard time seeing how they get to a point where revenues are higher than the amount of cash they burn." Anthropic raised $3.5 billion in early March, valuing the champion of responsible AI at $61.5 billion.

Generative AI rivals racing to the future

Since ChatGPT burst onto the scene in late 2022, generative artificial intelligence (GenAI) models have been vying for the lead - with the US and China hotbeds for the technology. The Tesla tycoon bought Twitter in late 2022.Since ChatGPT burst onto the scene in late 2022, generative artificial intelligence (GenAI) models have been vying for the lead - with the US and China hotbeds for the technology. GenAI tools are able to create images, videos, or written works as well as answer questions or tend to online tasks based on simple prompts. These AI assistants stand out for their popularity and sophistication. Hot ChatGPT AI existed before ChatGPT, but it was first to make GenAI freely available for people to use as a dedicated application. San Francisco-based OpenAI has made ChatGPT more powerful and capable with each update, the most recent being GPT 4.5. One version of ChatGPT released late last year, called o1, was touted as a new-generation that takes time to ponder answers, providing comprehensive results and less inclined to err. Instead of instantly cranking out results, the model shares its "chain of thought". OpenAI has imbued ChatGPT with the ability to act as a digital "agent" capable of browsing the internet, compiling information and using computers the way people do when working on tasks. Google Gemini Google has long put AI to work behind the scenes at its platform but cranked out Bard to take on ChatGPT in March of 2023. Bard was gradually replaced by a more advanced Gemini model built into Pixel phones and more. The Internet giant integrated Gemini into its famous search engine to display results summaries called "AI Overviews" along with links in response to queries. Google also put AI to work letting people search using pictures, video, or sound instead of just typed words. Such "multimodal" input capability has become common in GenAI tools. A Gemini 2.0 model capable of "step-by-step" reasoning made its debut in February of this year. Cautious Claude Founded by former OpenAI engineers, Anthropic launched Claude in March 2023. The San Francisco-based startup stresses responsible development of AI, moving more cautiously than competitors as it innovates. Anthropic unveiled Claude 3.7 Sonnet in February, its first model combining instant responses and thoughtful reasoning. Claude was previously enhanced with a "computer use" feature that let the AI independently perform computer tasks as a person might. Mighty Meta Meta has integrated custom AI into Facebook, Instagram, Threads, WhatsApp, Messenger and its Ray-Ban connected glasses with the aim of making it the most widely used digital assistant in the world. Meta's chatbot is based on the tech firm's open-source Llama model, considered one of the most powerful in the world. Recent press reports tell of plans by the Silicon Valley titan to release MetaAI as a stand-alone application in a direct challenge to OpenAI and Google. Grok Snark A co-founder of OpenAI, Elon Musk cut ties with the startup in 2018. Since ChatGPT took the lead in the GenAI race, Musk has sued OpenAI, offered to buy it, and launched a rival named xAI. Musk's chatbot Grok has the advantage of being able to use the trove of posts at X, formerly Twitter, for training the AI model. The Tesla tycoon bought Twitter in late 2022. Musk made up for lost time by spending billions of dollars on high-end Nvidia chips for powering AI datacenters. He promotes Grok as a chatbot with personality, humor and fewer constraints on what it produces. Upstart DeepSeek DeepSeek was founded in 2023 by Chinese investment fund High-Flyer. In January 2025, the Hangzhou-based start-up turned the world of generative AI upside down with its R1 model. DeepSeek claims the AI tool was built using less sophisticated chips than its competitors, slashing the cost. The application was downloaded tens of millions of times in just a few weeks. Mounting mix Chinese tech behemoths Tencent (Yuanbao), Baidu (Ernie) and ByteDance (Doubao) are also vying for position in the AI market. In early March, Alibaba released its QwQ-32B model, which it claims matches the performance of DeepSeek-R1. France-based Mistral early last year released Le Chat, AI software particularly advanced in document and image analysis.

DeepSeek dims shine of AI stars

China-based DeepSeek shook up the world of generative artificial intelligence (GenAI) early this year with a low-cost but high-performance model that challenges the hegemony of OpenAI and other big-spending behemoths. But then DeepSeek upended the sector with its R1 model, which it said cost just $6 million or so, powered by less-advanced chips.China-based DeepSeek shook up the world of generative artificial intelligence (GenAI) early this year with a low-cost but high-performance model that challenges the hegemony of OpenAI and other big-spending behemoths. Since late 2022, just a handful of AI assistants -- such as OpenAI's ChatGPT, Anthropic's Claude, and Google's Gemini -- have reigned supreme, becoming ever more capable thanks to multi-billion-dollar investments in engineers, data centers, and high-performance AI chips. But then DeepSeek upended the sector with its R1 model, which it said cost just $6 million or so, powered by less-advanced chips. While specialists suspect DeepSeek may have cost more than its creators claim, its debut fueled talk that GenAI assistants are becoming just a regular commodity, thanks to innovation and market forces. "The first company to train models must expend lots of resources to get there," said CFRA senior equity analyst Angelo Zino. "The second mover can get there cheaper and more quickly." At a HumanX AI conference in Las Vegas this week, Hugging Face co-founder Thomas Wolf said it is getting less expensive to launch GenAI models -- and less important which one people use. "I feel like we are moving to this multi-model world, which is a good thing," Wolf said, pointing to the muted reception given to the most recent version of ChatGPT. Stay flexible At the conference, OpenAI chief product officer Kevin Weil pushed back against the notion that all models are created equal. "That's actually not true," Weil said. "The days of us having a 12-month lead are probably gone, but I think we have a three- to six-month lead, and that is really valuable." Weil said OpenAI plans to fight to keep that narrowing edge over its competitors. With 400 million users, San Francisco-based OpenAI has the advantage of being able to use data from massive traffic to continually improve its models, Weil explained. "OpenAI has the Google advantage of being the thing that's in everybody's minds," said Alpha Edison equity firm research director Fen Zhao. Jeff Seibert, chief of the accounting and AI start-up Digits, agreed that OpenAI will stay ahead of the pack but added that he expects the gap to eventually close. "For advanced use cases, yes, there will be a lot of advantages," he said of OpenAI's position. "But for a lot of stuff, it won't matter as much." Seibert advises entrepreneurs to design their technology to allow them to swap out GenAI models, affording them flexibility in a quickly changing industry. Cash burn Improved use of chips and new optimization techniques have driven down the cost of designing the large language models (LLMs) that power ChatGPT, Gemini and their rivals. An open-source approach taken by some LLMs is credited with helping accelerate innovation by making the software free for anyone to tinker with and improve. The valuation of closed-model startups such as Anthropic and OpenAI has likely peaked as their "first-mover advantage dissipates," according to Zino. Japanese investment colossus SoftBank pumped $40 billion into OpenAI in February in a deal that valued the startup at $300 billion -- almost double what it was last year. "If you're burning a billion dollars a month, which I think OpenAI is, you have to keep raising money," said Jai Das of private equity firm Sapphire Ventures. "I have a hard time seeing how they get to a point where revenues are higher than the amount of cash they burn." Anthropic raised $3.5 billion in early March, valuing the champion of responsible AI at $61.5 billion.

Generative AI rivals racing to the future - VnExpress International

Since ChatGPT burst onto the scene in late 2022, generative artificial intelligence (GenAI) models have been vying for the lead - with the U.S. and China hotbeds for the technology. GenAI tools are able to create images, videos, or written works as well as answer questions or tend to online tasks based on simple prompts. These AI assistants stand out for their popularity and sophistication. Hot ChatGPT AI existed before ChatGPT, but it was first to make GenAI freely available for people to use as a dedicated application. San Francisco-based OpenAI has made ChatGPT more powerful and capable with each update, the most recent being GPT 4.5. One version of ChatGPT released late last year, called o1, was touted as a new-generation that takes time to ponder answers, providing comprehensive results and less inclined to err. Instead of instantly cranking out results, the model shares its "chain of thought". OpenAI has imbued ChatGPT with the ability to act as a digital "agent" capable of browsing the internet, compiling information and using computers the way people do when working on tasks. Google Gemini Google has long put AI to work behind the scenes at its platform but cranked out Bard to take on ChatGPT in March of 2023. Bard was gradually replaced by a more advanced Gemini model built into Pixel phones and more. The Internet giant integrated Gemini into its famous search engine to display results summaries called "AI Overviews" along with links in response to queries. Google also put AI to work letting people search using pictures, video, or sound instead of just typed words. Such "multimodal" input capability has become common in GenAI tools. A Gemini 2.0 model capable of "step-by-step" reasoning made its debut in February of this year. Cautious Claude Founded by former OpenAI engineers, Anthropic launched Claude in March 2023. The San Francisco-based startup stresses responsible development of AI, moving more cautiously than competitors as it innovates. Anthropic unveiled Claude 3.7 Sonnet in February, its first model combining instant responses and thoughtful reasoning. Claude was previously enhanced with a "computer use" feature that let the AI independently perform computer tasks as a person might. Mighty Meta Meta has integrated custom AI into Facebook, Instagram, Threads, WhatsApp, Messenger and its Ray-Ban connected glasses with the aim of making it the most widely used digital assistant in the world. Meta's chatbot is based on the tech firm's open-source Llama model, considered one of the most powerful in the world. Recent press reports tell of plans by the Silicon Valley titan to release MetaAI as a stand-alone application in a direct challenge to OpenAI and Google. Grok Snark A co-founder of OpenAI, Elon Musk cut ties with the startup in 2018. Since ChatGPT took the lead in the GenAI race, Musk has sued OpenAI, offered to buy it, and launched a rival named xAI. Musk's chatbot Grok has the advantage of being able to use the trove of posts at X, formerly Twitter, for training the AI model. The Tesla tycoon bought Twitter in late 2022. Musk made up for lost time by spending billions of dollars on high-end Nvidia chips for powering AI datacenters. He promotes Grok as a chatbot with personality, humor and fewer constraints on what it produces. Upstart DeepSeek DeepSeek was founded in 2023 by Chinese investment fund High-Flyer. In January 2025, the Hangzhou-based start-up turned the world of generative AI upside down with its R1 model. DeepSeek claims the AI tool was built using less sophisticated chips than its competitors, slashing the cost. The application was downloaded tens of millions of times in just a few weeks. Mounting mix Chinese tech behemoths Tencent (Yuanbao), Baidu (Ernie) and ByteDance (Doubao) are also vying for position in the AI market. In early March, Alibaba released its QwQ-32B model, which it claims matches the performance of DeepSeek-R1. France-based Mistral early last year released Le Chat, AI software particularly advanced in document and image analysis.

Generative AI rivals racing to the future

LAS VEGAS (AFP) - Since ChatGPT burst onto the scene in late 2022, generative artificial intelligence (GenAI) models have been vying for the lead - with the US and China hotbeds for the technology. GenAI tools are able to create images, videos, or written works as well as answer questions or tend to online tasks based on simple prompts. These AI assistants stand out for their popularity and sophistication. AI existed before ChatGPT, but it was first to make GenAI freely available for people to use as a dedicated application. San Francisco-based OpenAI has made ChatGPT more powerful and capable with each update, the most recent being GPT 4.5. One version of ChatGPT released late last year, called o1, was touted as a new-generation that takes time to ponder answers, providing comprehensive results and less inclined to err. Instead of instantly cranking out results, the model shares its "chain of thought". OpenAI has imbued ChatGPT with the ability to act as a digital "agent" capable of browsing the internet, compiling information and using computers the way people do when working on tasks. Google has long put AI to work behind the scenes at its platform but cranked out Bard to take on ChatGPT in March of 2023. Bard was gradually replaced by a more advanced Gemini model built into Pixel phones and more. The Internet giant integrated Gemini into its famous search engine to display results summaries called "AI Overviews" along with links in response to queries. Google also put AI to work letting people search using pictures, video, or sound instead of just typed words. Such "multimodal" input capability has become common in GenAI tools. A Gemini 2.0 model capable of "step-by-step" reasoning made its debut in February of this year. Founded by former OpenAI engineers, Anthropic launched Claude in March 2023. The San Francisco-based startup stresses responsible development of AI, moving more cautiously than competitors as it innovates. Anthropic unveiled Claude 3.7 Sonnet in February, its first model combining instant responses and thoughtful reasoning. Claude was previously enhanced with a "computer use" feature that let the AI independently perform computer tasks as a person might. Meta has integrated custom AI into Facebook, Instagram, Threads, WhatsApp, Messenger and its Ray-Ban connected glasses with the aim of making it the most widely used digital assistant in the world. Meta's chatbot is based on the tech firm's open-source Llama model, considered one of the most powerful in the world. Recent press reports tell of plans by the Silicon Valley titan to release MetaAI as a stand-alone application in a direct challenge to OpenAI and Google. A co-founder of OpenAI, Elon Musk cut ties with the startup in 2018. Since ChatGPT took the lead in the GenAI race, Musk has sued OpenAI, offered to buy it, and launched a rival named xAI. Musk's chatbot Grok has the advantage of being able to use the trove of posts at X, formerly Twitter, for training the AI model. The Tesla tycoon bought Twitter in late 2022. Musk made up for lost time by spending billions of dollars on high-end Nvidia chips for powering AI datacenters. He promotes Grok as a chatbot with personality, humor and fewer constraints on what it produces. DeepSeek was founded in 2023 by Chinese investment fund High-Flyer. In January 2025, the Hangzhou-based start-up turned the world of generative AI upside down with its R1 model. DeepSeek claims the AI tool was built using less sophisticated chips than its competitors, slashing the cost. The application was downloaded tens of millions of times in just a few weeks. Chinese tech behemoths Tencent (Yuanbao), Baidu (Ernie) and ByteDance (Doubao) are also vying for position in the AI market. In early March, Alibaba released its QwQ-32B model, which it claims matches the performance of DeepSeek-R1. France-based Mistral early last year released Le Chat, AI software particularly advanced in document and image analysis.