DeepSeek claims it would have a 545% profit margin. There's a catch.
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DeepSeek claims it would have a 545% profit margin. There's a catch.

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What’s on deck

Markets: Hedge funds’ February report cards are in.?

Tech: DeepSeek said its AI models could have an incredible profit margin. There’s just one not-so-small catch.?

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Alex Hoffmann

CEO & Co-Founder at Marvin Labs

1 天前

This is by far not the most interesting insight from the data published by the company recently. DeepSeek manages to 10x the output per GPU compared to Meta's Llama models, and uses only about $55m worth of GPUs to run their operations. Who needs a $500bn Stargate project? https://www.dhirubhai.net/posts/alexander-hoffmann-cfa_what-if-ai-didnt-need-billions-in-hardware-activity-7303007601644949505-y4Kl?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAtc17ABtTrEd3_7e1d8ZFaVmO8DEMBDazY

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Deep Seek: China's Rising AI Challenger Reshaping the Global Landscape Chinese startup Deep Seek has intensified the global AI race, directly challenging U.S. tech giants with its advanced models. Critical questions arise as the AI industry rapidly evolves: Can American firms retain their dominance, or is the balance shifting? Deep Seek's AI reasoning, efficiency, and language processing advancements underscore China's growing influence in artificial intelligence. To read more... please visit: https://vichaardhara.co.in/index.php/2025/02/17/deep-seek-china-rising-ai-challenger-reshaping-the-global-landscape/

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Christevans Sahuji

Overthinker | Opinionator | Global Affairs Enthusiast

1 天前

Projected, means this is a hopeful estimate, achievable only if all their current users pay for the service. While it's still extremely cheap compared to other models, assuming that everyone would pay is a bold assumption. Another angle worth considering is that most of DeepSeek's users are in China and India, where, unlike in the US, there aren’t well-established systems for managing recurring payments. This exposes DeepSeek to the risk of users not paying for the service. However, this is good news for NVIDIA and other chip manufacturers. DeepSeek has proven that a powerful LLM can be built without necessarily using NVIDIA's expensive chips. This allows developers to make a small return and profit from their models, enabling them to continue buying NVIDIA chips. Keep in mind that most LLM companies aren’t profitable because training models is extremely expensive. OpenAI, for instance, is a nonprofit organization, which isn't ideal for investors. The emergence of DeepSeek might help change that. So, while the 545% projection remains uncertain for DeepSeek, in the broader LLM industry, it also represents a 545% chance for companies to achieve better profit margins.

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