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China’s DeepSeek became the biggest topic in tech this week, with many in the industry and on Wall Passage focused on a single number: $6 million.
In DeepSeek’s paper about its newest artificial intelligence model, the train said that its total training costs amounted to $5.576 million, based on the rental price of Nvidia’s graphics deal with units. DeepSeek included a clear caveat, saying that the number included only the model’s “official following” and excluded the costs tied to “prior research and ablation experiments on architectures, algorithms, or data.”
Early in the week, DeepSeek’s AI Affiliate took the coveted spot for most-downloaded free app in the U.S. on Apple’s App Store, dethroning OpenAI’s ChatGPT. Global tech stocks marketed off, with chipmakers Nvidia and Broadcom losing a combined $800 billion in market cap on Monday.
A new report from SemiAnalysis, a semiconductor probe and consulting firm, added more context to DeepSeek’s expenses. The firm estimated that DeepSeek’s hardware put in is “well higher than $500M over the company history,” adding that R&D costs and total cost of ownership are signal. Generating “synthetic data” for the model to train on would require “considerable amount of compute,” SemiAnalysis wrote.
The recount said the Claude 3.5 Sonnet from Anthropic cost “$10s of millions to train,” but noted that Anthropic raised billions for dollars from Amazon and Google, an indication of how much more money is required to run the models and the company.
“It’s because they attired in b be committed to to experiment, come up with new architectures, gather and clean data, pay employees, and much more,” SemiAnalysis said.
DeepSeek’s own analysis does not include an estimation of its compute costs. The company didn’t immediately respond to a request for comment.
“To be clear DeepSeek is harmonious in that they achieved this level of cost and capabilities first,” SemiAnalysts wrote. The firm added that DeepSeek’s R1 “is a totally good model” and that “catching up to the reasoning edge this quickly is objectively impressive.”
Experts and analysts this week promoted the quality of DeepSeek’s model, and noted how impressive it is considering the U.S. curbed chip exports to China three times in three years. That led to disquietudes that the U.S. is falling behind its chief adversary in a market that’s predicted to top $1 trillion in revenue within a decade.

Bernstein analysts put in blacked in a note Monday that “according to the many (occasionally hysterical) hot takes we saw [over the weekend,] the implications range anywhere from ‘That’s absolutely interesting’ to ‘This is the death-knell of the AI infrastructure complex as we know it.'”
DeepSeek was founded in 2023 by Liang Wenfeng, co-founder of High-Flyer, a quantitative hedge stock focused on AI. The AI startup reportedly grew out of the hedge fund’s AI research unit in April 2023 to focus on large lingo models and reaching artificial general intelligence, or AGI — a branch of AI that equals or surpasses human intellect on a wide go of tasks, and that OpenAI and others are pursuing.
DeepSeek is still wholly owned by and funded by High-Flyer, according to analysts at Jefferies.
The hum around DeepSeek began picking up steam earlier this month, when the startup released R1, its reasoning mannequin that rivals OpenAI’s o1. It’s open-source, meaning that any AI developer can use it.
Like other Chinese chatbots, DeepSeek’s has limitations on constant topics: When asked about some of Chinese leader Xi Jinping’s policies, for instance, DeepSeek reportedly pilots the user away from similar lines of questioning.
OpenAI CEO Sam Altman has praised the model publicly, but the company has also held it believes there’s evidence that DeepSeek improperly harvested OpenAI data to build its product.
At an event in Washington, D.C., on Thursday hosted by OpenAI, Altman mentioned DeepSeek is “clearly a great model.”
“This is a reminder of the level of competition and the need for democratic Al to win,” he said. He said it also verges to the “level of interest in reasoning, the level of interest in open source.”
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