A Chinese artificial intelligence lab has done more than just build a cheaper AI model—it’s exposed the inefficiency of the entire industry’s approach.

DeepSeek’s breakthrough showed how a small team, in an effort to save money, was able to rethink how AI models are built. While tech giants like OpenAI and Anthropic spend several billions of dollars on compute power alone, DeepSeek purportedly achieved similar results for just over $5 million.

The company’s model matches or beats GPT-4o (OpenAI’s best LLM), OpenAI o1—OpenAI’s best reasoning model currently available—and Anthropic’s Claude 3.5 Sonnet on many benchmark tests, using roughly 2.788M H800 GPU hours for its full training. That’s a very small fraction of the hardware traditionally thought necessary.

The model is so good and efficient, it climbed to the top of Apple’s iOS productivity apps category in a matter of days, challenging OpenAI’s dominance.

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Author: Jose Antonio Lanz

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