Chinese artificial intelligence startup DeepSeek has unveiled a theoretical daily profit margin of 545% for its V3 and R1 models, offering a rare glimpse into the financial dynamics of AI operations.
This revelation highlights DeepSeek’s innovative approach in a competitive industry where profitability remains a critical concern.
In a recent GitHub post, DeepSeek detailed that the daily operational cost for these models stands at approximately $87,072. This calculation is based on renting Nvidia’s H800 chips at $2 per hour. In contrast, the theoretical daily revenue is estimated at $562,027, resulting in a cost-profit ratio of 545%. Over a year, this could translate to revenues exceeding $200 million.
However, DeepSeek emphasizes that these figures are theoretical. Actual revenues are lower due to several factors, including offering free web and app access, providing reduced developer fees during off-peak hours, and the varying costs associated with different models.
Founded 20 months ago, DeepSeek has rapidly gained attention for its cost-effective AI model development. The company claims that training its models required less than $6 million in chip expenditures, significantly lower than the investments made by U.S. counterparts like OpenAI. This cost efficiency is partly attributed to the use of Nvidia’s H800 chips, which, while less powerful than those used by competitors, have proven effective for DeepSeek’s needs.
The disclosure of these profit margins comes at a time when AI startups are under scrutiny regarding their financial viability. Companies such as OpenAI and Anthropic PBC are exploring various revenue models, from subscriptions to usage-based fees, to achieve profitability.
Investors are increasingly questioning the return on investment in the AI sector, making DeepSeek’s cost-profit ratio particularly noteworthy.
DeepSeek’s commitment to transparency extends beyond financial disclosures. The company has embraced an open-source approach, sharing key innovations and data underpinning its models.
This contrasts with the proprietary strategies of many U.S. rivals and underscores DeepSeek’s dedication to fostering collaboration within the AI community.
The company’s innovative and cost-effective methodologies have positioned it as a formidable player in the AI landscape. As DeepSeek continues to refine its models and operational strategies, its impact on the global AI industry is poised to grow, challenging established norms and encouraging a reevaluation of cost structures within the sector.
I’m David Paul, a news writer at DeepSeek Insider, where I cover the latest developments in artificial intelligence, large language models (LLMs), and emerging AI tools in the market. With a keen interest in these cutting-edge technologies, I deliver insightful and timely updates to keep our audience informed and engaged.