DeeperML

Chinese AI company DeepSeek is making waves in the global AI market with its high profit margins and low pricing. The company makes $200 million per year at 85% or greater profit margins, even while charging $2.19 per million tokens on its R1 model, about 25 times less than OpenAI. DeepSeek's financial data suggests a theoretical peak revenue could exceed operating costs by six times when using optimal R1 model pricing.

The company's success has prompted Tencent to unveil its own AI platform, Hunyuan Turbo S, designed specifically to compete with DeepSeek. Although Hunyuan Turbo S is the clear winner in certain cases, it still falls behind DeepSeek-R1-Zero in several instances. DeepSeek uses smart resource management and a dynamic resource allocation system which keeps costs down.

ImgSrc: the-decoder.com

References :

• OODAloop: In the two months since a little-known Chinese company called DeepSeek released a powerful new open-source AI model, the breakthrough has already begun to transform the global AI market.
• THE DECODER: Newly released data from Chinese AI provider Deepseek reveals that AI language models could, in theory, generate substantial profit margins—even at prices significantly lower than OpenAI’s.
• Neural Magic: The 4-bit Breakdown Quantized Reasoning Models In recent research, including We Ran Over Half a Million Evaluations on Quantized LLMs and How Well Do Quantized Models Handle Long-Context Tasks?, we’ve shown that quantized large language models (LLMs) rival their full-precision counterparts in accuracy across diverse benchmarks, covering academic, real-world use cases, and long-context evaluations while…
• MarkTechPost: DeepSeek AI Releases Fire-Flyer File System (3FS): A High-Performance Distributed File System Designed to Address the Challenges of AI Training and Inference Workload
• eWEEK: Headquartered in Shenzhen, China, the team with Tencent recently unveiled their new AI platform called Hunyuan Turbo S.
• NextBigFuture.com: DeepSeek has revealed they makes $200M/yr at 85%+ profit margins. This means their profits margins are larger than the 72-77% profit margins of Nvidia.
• TechCrunch: Chinese AI startup DeepSeek recently declared that its AI models could be very profitable — with some asterisks. In a post on X, DeepSeek boasted that its online services have a “cost profit marginâ€� of 545%. However, that margin is calculated based on “theoretical income.â€�
• Stuff South Africa: DeepSeek is now a global force. But it’s just one player in China’s booming AI industry
• Unite.AI: DeepSeek and AI Power Shift: Key Insights for Investors and Entrepreneurs
• AI News | VentureBeat: While DeepSeek-R1 operates with 671 billion parameters, QwQ-32B achieves comparable performance with a much smaller footprint.
• bdtechtalks.com: Alibaba’s QwQ-32B reasoning model matches DeepSeek-R1, outperforms OpenAI o1-mini

Classification:

• HashTags: #DeepSeekAI #AILanguageModels #ChinaAI
• Company: DeepSeek
• Target: AI Industry
• Attacker: DeepSeek
• Product: DeepSeek-V3
• Feature: Cost efficiency
• Malware: DeepSeek-V3
• Type: AI
• Severity: Informative