DeepSeek's AI Model Shakes Up the Industry with Low-Cost Training

Chinese AI developer DeepSeek claims its R1 model training costs were significantly lower than U.S. competitors, sparking debate on China's AI capabilities. A Nature article revealed R1's $294,000 training cost using Nvidia H800 chips. The company faced scrutiny for distilling other AI models and its access to restricted chips.


Devdiscourse News Desk | Updated: 19-09-2025 07:43 IST | Created: 19-09-2025 07:43 IST
DeepSeek's AI Model Shakes Up the Industry with Low-Cost Training
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In a surprising revelation, Chinese AI developer DeepSeek announced that it spent only $294,000 on training its R1 model, a stark contrast to the exorbitant figures reported by its U.S. counterparts. This disclosure in the prestigious journal Nature is expected to renew debates about China's position in the global AI landscape.

The Hangzhou-based company, which has remained mostly out of the public eye since releasing low-cost AI systems in January, detailed R1 model's training process involving 512 Nvidia H800 chips. This update marks the first cost estimate provided by DeepSeek, raising questions among U.S. firms about its strategic methods.

DeepSeek's use of distillation techniques, where its models learn from others like Meta's Llama AI model, has been both criticized and defended. As DeepSeek navigates concerns over intellectual property and chip access, it continues to challenge the status quo among AI technology leaders.

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