DeepSeek releases open-source AI models that rival GPT-5 and Gemini at fraction of the cost

Reviewed byNidhi Govil

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Chinese AI company DeepSeek launched two new reasoning models, V3.2 and V3.2-Speciale, claiming performance on par with OpenAI's GPT-5 and Google's Gemini 3.0 Pro. The open-source models cost $0.028 per million tokens compared to Gemini 3's $4.00, and achieved gold-level performance in elite international math and coding competitions. The release challenges American tech dominance while making frontier AI capabilities freely accessible.

DeepSeek Launches New Reasoning Models to Challenge Tech Giants

The Chinese AI company DeepSeek has released two new reasoning models, DeepSeek V3.2 and DeepSeek V3.2-Speciale, positioning them as direct competitors to OpenAI's GPT-5 and Google's Gemini 3.0 Pro

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. The Hangzhou-based startup announced Monday that V3.2 is now available on its app, web interface, and API, while the more powerful V3.2-Speciale variant can only be accessed through a temporary API endpoint until December 15, 2025

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. Both AI models have been released under an open-source MIT license, with weights accessible via Hugging Face, continuing DeepSeek's pattern of making frontier AI systems freely available

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Source: Seeking Alpha

Source: Seeking Alpha

According to company benchmarks, DeepSeek V3.2 surpasses GPT-5 in reasoning performance and matches Gemini 3.0 Pro on key metrics

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. The V3.2-Speciale variant achieved even more striking results, earning gold-medal status at four elite international competitions: the 2025 International Mathematical Olympiad, the International Olympiad in Informatics, the ICPC World Finals, and the China Mathematical Olympiad

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. These achievements position the models among the most capable systems currently available, directly challenging American tech dominance in AI development.

Open-Source AI Models Slash Computational Costs Dramatically

What sets these new reasoning models apart is their cost efficiency. Accessing Gemini 3 through the API costs up to $4.00 per million tokens, while DeepSeek V3.2-Speciale runs at just $0.028 per million tokens

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. Processing 128,000 tokens—roughly equivalent to a 300-page book—now costs approximately $0.70 per million tokens for decoding, compared to $2.40 for the previous V3.1-Terminus model, representing a 70% reduction in inference costs

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. This dramatic cost reduction threatens to undermine the substantial investments that proprietary labs like OpenAI, Google, and Anthropic pour into their models.

The 685-billion-parameter models support context windows of 128,000 tokens, making them suitable for analyzing lengthy documents, codebases, and research papers

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. Despite the massive scale—DeepSeek noted the model can only run on giant server stacks with millions of dollars in hardware—the open source nature means any company can access the model weights for free

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. This accessibility enables solo developers and student teams to work with systems that just months ago would have required a lab and substantial cloud budget

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DeepSeek Sparse Attention Breakthrough Drives Performance Gains

At the core of DeepSeek's efficiency lies DeepSeek Sparse Attention (DSA), an architectural innovation that dramatically reduces the computational burden of running AI models on long documents and complex tasks

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. Traditional attention mechanisms scale poorly as input length increases—processing a document twice as long typically requires four times the computation. DSA breaks this constraint using a "lightning indexer" that identifies only the most relevant portions of context for each query, essentially skimming rather than reading every word

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Source: VentureBeat

Source: VentureBeat

The company deployed this approach in two phases: an initial high-level scan of tokens in training data to identify the small subset most relevant to a particular query, then drilling into that subset with full computational power

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. According to DeepSeek's technical report, DSA reduces inference costs by roughly half compared to previous models when processing long sequences, slashing costs for long documents by up to 70%

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. Independent evaluations on long-context benchmarks show V3.2 performing on par with or better than its predecessor despite incorporating the sparse attention mechanism

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Rivals GPT-5 and Gemini 3.0 Pro on Elite Benchmarks

DeepSeek's claims of parity with leading American AI systems rest on extensive testing across mathematics, coding, and reasoning tasks. On AIME 2025, a prestigious American mathematics competition, DeepSeek V3.2-Speciale achieved a 96.0% pass rate, compared to 94.6% for GPT-5-High and 95.0% for Gemini 3.0 Pro

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. On the Harvard-MIT Mathematics Tournament, the Speciale variant scored 99.2%, surpassing Gemini's 97.5%. The standard V3.2 model scored 93.1% on AIME and 92.5% on HMMT—marginally below frontier AI systems but achieved with substantially fewer computational resources

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The competition results proved especially striking. DeepSeek V3.2-Speciale scored 35 out of 42 points on the 2025 International Mathematical Olympiad, earning gold-medal status, and scored 492 out of 600 points at the International Olympiad in Informatics—also gold, ranking 10th overall

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. These results came without internet access or external tools during testing. On coding benchmarks, DeepSeek V3.2 resolved 73.1% of real-world software bugs on SWE-Verified, competitive with GPT-5-High at 74.9%, while on Terminal Bench 2.0, measuring complex coding workflows, DeepSeek scored 46.4%—well above GPT-5-High's 35.2%

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Thinking in Tool-Use Transforms Agent Capabilities

Beyond raw reasoning, DeepSeek V3.2 introduces "thinking in tool-use"—the ability to reason through problems while simultaneously executing code, searching the web, and manipulating files

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. Previous AI models faced a frustrating limitation: each time they called an external tool, they lost their train of thought. DeepSeek fixed this by preserving memory across tools, training the model using over 85,000 complex synthetic instructions to work with tools like real web browsers and coding environments

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The models represent an expansion of DeepSeek's agent training approach, supported by a new synthetic dataset spanning more than 1,800 environments

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. This level of real-world task preparation enables capabilities that most current chatbots simply aren't built for—planning multi-day vacations under strict budgets with interdependent constraints while testing code snippets and checking exchange rates simultaneously

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. The company stated that V3.2 is its first model to integrate thinking directly into tool use, allowing structured reasoning to operate both within and alongside external tools

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Global AI Competition Intensifies Amid Geopolitical Tensions

DeepSeek's release carries profound implications for American technology leadership and the broader AI competition. The company has demonstrated it can produce frontier AI systems despite U.S. export controls that restrict China's access to advanced Nvidia chips

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. The company first gained worldwide attention earlier this year when it released a reasoning-capable model online for free, immediately turning the narrative about reasoning models on its head by showing it's possible to run smarter, more capable AI models at a fraction of the cost

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. This spooked Wall Street, with some wondering if OpenAI, Google, and Anthropic weren't innovating fast enough.

Source: TechRadar

Source: TechRadar

Since then, ChatGPT, Gemini, and Claude have all released reasoning-level models for free, with higher-level "thinking" models available for paid subscribers

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. However, openness doesn't mean transparency. German regulators have tried to block DeepSeek over data transfer concerns, Italy banned the app earlier this year, and U.S. lawmakers want it off government devices entirely

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. The geopolitical context looms large, raising questions about what American firms offer that justifies their markup if DeepSeek's models deliver frontier performance at dramatically lower costs while remaining freely accessible under the MIT license.

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