DeepSeek has developed capable models with cheaper and lower-quality processes. What does that mean for global tech giants?
has threatened the monopoly status of tech giants in the "arms race" to capable Artificial Intelligence after developing a model with cheaper and lower quality systems, an expert has explained.
According to DeepSeek, the R1 API costs $0.88 per million input tokens and $3.49 per million output tokens compared to OpenAI's o1 API which costs $23.92 and $95.70 respectively — about 20 to 50 times cheaper than its rival."Today to be in the game of developing the core AI systems, you've needed to be making investments in the billions of dollars," Geoff Webb, Monash University Professor and Research Director of the Department of Data Science and AI, said.
"One of the problems is that all of the players in this arms race keep the inner details of what they're doing very, very close to their chests," he said. DeepSeek's chief executive Liang Wenfeng also co-founded the hedge fund and AI company High-Flyer, which amassed 10,000 Nvidia's A100 graphics processor chips.The US then passed a ban on supplying those chips to China.
OpenAI also raised $10.5 billion from investors. Meta also recently announced it plans to spend up to $103 billion to expand its AI infrastructure."DeepSeek is not yet level with the leading AI players but it's showing that they're not as far ahead as what was previously thought," he said.
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