Summary
Chinese AI startup DeepSeek initially claimed to have trained its competitive R1 model with only $6 million and 2,048 GPUs.
However, a SemiAnalysis report reveals the company has actually invested $1.6 billion in hardware and owns 50,000 Nvidia GPUs.
DeepSeek has also spent well over $500 million on AI development since its inception.
DeepSeek operates its own data centers and exclusively hires from China, offering top salaries.
The report suggests its success stems from major investments rather than radical efficiency, countering initial claims of disruptive cost reductions.
In any case, even if it was true, the $6M would be misleading, as the distilled other models, so the total it was more like 100 billion and 6 million dollars total cost.
Still a cool result, but short of revolutionary.
You know that if you want to make cake from scratch you first need to invent the universe…