DeepSeek R1 makes a splash as free ChatGPT competitor upends AI world

DeepSeek, a new generative AI chatbot, has taken the artificial intelligence community by storm since it launched last week. The Chinese-made ChatGPT competitor has ruffled feathers as it can compete with OpenAI’s flagship o1 model and allegedly cost a fraction of the US-based AI to develop.

While the benchmarks and real-world testing since DeepSeek lit a fire under the AI world, the cost of operations has been questioned. Companies like Microsoft and Meta have spent billions of dollars training and working on AI, with both companies set to spend more than $65 billion through 2025.

However, DeepSeek claims to have created an o1-level model that operates at 95% of the cost. If o1 costs $15 per million input tokens and $60 per million output tokens (one token is about 4 characters), DeepSeek is estimated to cost around $0.55 and $2.19 per million input and output tokens, respectively.

We are living in a timeline where a non-US company is keeping the original mission of OpenAI alive – truly open, frontier research that empowers all. It makes no sense. The most entertaining outcome is the most likely.

DeepSeek-R1 not only open-sources a barrage of models but… pic.twitter.com/M7eZnEmCOY

— Jim Fan (@DrJimFan) January 20, 2025

The other side of this is that DeepSeek has made R1 open source. Nvidia Senior Research Manager, Dr. Jim Fan, said that it is “keeping the original mission of OpenAI alive”. OpenAI was originally intended as a non-profit organization to advance digital intelligence to benefit the whole of humanity. The Sam Altman-led company is now a for-profit company.

Fan also praised the development of the DeepSeek AI. By being open source, it will allow developers to poke around and learn from DeepSeek, or potentially improve it.

DeepSeek is also entirely free to use right now, aside from handing over data by logging in. In 2023, a leaked Google document claimed that open-source alternatives to the major players’ options would outcompete them.

There’s a real possibility that if DeepSeek manages to catch on with the wider public – the app is already top on iOS – OpenAI and others would need to consider dropping their prices. Currently, OpenAI charges a maximum of $200 a month for its top-end models.

Some researchers are now claiming that DeepSeek isn’t infallible, and that benchmarks aren’t the best measure of success. In some of the tougher reasoning benchmarks, DeepSeek struggles to outpace the o1-mini, a more restricted version of the flagship model. On Reddit, some users stated that DeepSeek’s work in efficiency should still be studied.

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