Summary
Chinese AI startup DeepSeek initially claimed to have trained its competitive R1 model with only $6 million and 2,048 GPUs.
However, a SemiAnalysis report reveals the company has actually invested $1.6 billion in hardware and owns 50,000 Nvidia GPUs.
DeepSeek has also spent well over $500 million on AI development since its inception.
DeepSeek operates its own data centers and exclusively hires from China, offering top salaries.
The report suggests its success stems from major investments rather than radical efficiency, countering initial claims of disruptive cost reductions.
I think the fact that it’s open source and freely available for anyone to use is likely more disruptive than it being more efficient. OpenAI had a monopoly that just disappeared overnight.
But there are already several dozen (at least) open source models?