This is how DeepSeek built a powerful AI with less money
DeepSeek, a Chinese start-up, has managed to outperform industry giants such as Open AI and Meta with their innovative approach to building AI models. Despite using only 2,000 GPU chips compared to the usual 16,000 used by other tech companies, DeepSeek has achieved remarkable results by implementing cost-effective techniques like a mixture of experts.
This cost-saving strategy has not only allowed DeepSeek to cut down on expenses significantly but has also caused disruptions in the U.S. stock market. By designing their open-source DeepSeek-V3 model with 671 billion parameters, DeepSeek has proven that they can achieve efficiency and effectiveness beyond what competitors have accomplished.
Innovative Cost-Efficient Techniques
DeepSeek's success lies in their unique approach to AI development. By leveraging a Mixture of Expert (MoE) architecture in their V3 model, they have managed to activate only the necessary components of the model, thereby reducing computational waste. This, combined with DeepSeekMLA (Multi-head Latent Attention), has optimized memory usage and prioritized essential information, leading to unparalleled performance.
Unlike other companies that rely on expensive computing power, DeepSeek has shown that efficiency trumps sheer volume when it comes to AI technology. Despite facing challenges such as U.S. export restrictions and hardware limitations, DeepSeek has overcome these obstacles by communicating directly with hardware via PTX, bypassing NVIDIA's standard CUDA system.
Market Impact and Competitive Pricing
The unveiling of DeepSeek's AI system has had a significant impact on the financial markets, with NVIDIA experiencing a drop in share prices in response to DeepSeek's breakthroughs. This has raised concerns among other chip manufacturers such as AMD, Intel, and Chinese companies, highlighting DeepSeek's growing influence in the industry.
Despite these developments, DeepSeek has managed to maintain a competitive pricing strategy, offering their AI technology at a rate of $0.27 per million tokens as of Feb. 8, 2025. This affordability has positioned DeepSeek as a key player in the market, providing the best value for money compared to other competitors.
As DeepSeek continues to redefine the landscape of AI technology, their success raises questions about the future of AI development in China and the global market. With their groundbreaking innovations and efficient strategies, DeepSeek is setting a new standard for AI companies worldwide.
