- Deepseek says it took less than $ 6 million to build an AI model.
- The price of Deepseek “blows” competition.
- This could, according to analysts, trigger a price war for AI services.
Chinese startup Deepseek’s cheaper from AI has an investors’ control of billions than American technology giants pour to develop technology and analysts say that it will dominate the highly anticipated results of the industry industry.
Deepseek said it only took less than $ 6 million to build an AI model using less advanced NVIDIA H800 chips. An application powered by the V3 model has become the first iPhone download in the United States on Monday.
The startup founded in 2023 said that its AI models correspond or surpass the rivals of the United States to a fraction of the cost, which calls into question the opinion that the scale of the AI requires a vast power and a calculation investment.
Such a commercial need propelled an increase of approximately 10 billions of dollars of the market value of the “magnificent seven” of companies since Chatgpt launched the Boom of the AI in November 2022.
“Did Deepseek really build Openai for $ 5 million? Of course not,” said Bernstein analyst Stacy Rasgon. “It seems that it is an exaggerated to think that the innovations deployed by Deepseek are completely unknown by the leading researchers of the AI of the other many laboratories of the world.”
Deepseek prices escape from the competition, he said. The actions of the pioneer of the Ai Nvidia chip flowed 16%, Microsoft dropped by 3.8%and US TSMC shares dropped by 14%.
Rasgon and other analysts argue that Deepseek training costs for its V3 model could be higher, because nearly $ 6 million cited by the startup only understands the amount spent for computing power, while few things are known on the costs of creating the more publicized R1 model.
However, it is far from the $ 250 billion that analysts estimate that major American cloud companies will pass this year in AI infrastructure. This expenditure has been questioned by investors concerned about slow returns in the past year.
With most American technology giants that report the results this week and the next, analysts and investors expect business leaders to offer more clarity on their strategy.
“(The rise in power of Deepseek) calls into question if the current rate of CAPEX spending / technologies improvements is necessary. Comments from American hyperscalers will be essential this week to see if they remain aggressive with IA spending” said Afra Angelo Zino analyst.
“They will probably emphasize the need for greater computing power while we are heading towards agency and physical AI,” added Zino, referring to autonomous AI agents who require little intervention human for routine tasks, as well as robots and autonomous cars.
Pricing
While the price of the use of AI models has dropped with the increase in competition and the progress of technology, Rasgon de Bernstein said that Deepseek stands out while he has evaluated his models up to 40 times lower than the comparable models of Openai.
This could, said analysts, trigger a price war for AI services, potentially causing pressures from technological companies such as OpenAi which already lose billions of dollars each year due to high operational costs of management of services such as chatgpt.
“If the in -depth adoption is intensifying, this could initiate reductions in competitors’ price that have similar open source products,” said Gadjo Sevilla, main analyst at Emarketer.
“Market leaders like OpenAi (pushing for profitability) are unlikely to reduce short -term prices. They will probably double confidence and safety as key differentiation characteristics, which happens to business users. “”
Some experts also doubt that US companies would be willing to adopt Chinese AI technology, taking into account Sino-American tensions and concerns about confidentiality and data security.
Deepseek said that he stores user information in servers in China, which could be a point of collision in its American adoption.
Some investors, however, believe that American technology giants would jump on Deepseek breakthroughs and that cheaper AI services are required to increase the adoption of technology, which could increase flea demand.
“Did Deepseek seek and find a more effective treatment model for AI?
“(This) would only strengthen the opportunity for AI in the future.”