China’s DeepSeek claims theoretical cost-profit ratio of 545% per day

China’s DeepSeek claims theoretical cost-profit ratio of 545% per day


Lionel Bonaventure | Afp | Getty Images

Chinese AI startup DeepSeek on Saturday disclosed some cost and revenue data related to its hit V3 and R1 models, claiming a theoretical cost-profit ratio of up to 545% per day, though it cautioned that actual revenue would be significantly lower.

This marks the first time the Hangzhou-based company has revealed any information about its profit margins from less computationally intensive “inference” tasks, the stage after training that involves trained AI models making predictions or performing tasks, such as through chatbots.

The revelation could further rattle AI stocks outside China that plunged in January after web and app chatbots powered by its R1 and V3 models surged in popularity worldwide.

The sell-off was partly caused by DeepSeek’s claims that it spent less than $6 million on chips used to train the model, much less than what U.S. rivals like OpenAI have spent.

The chips DeepSeek claims it used, Nvidia’s H800, are also much less powerful than what OpenAI and other U.S. AI firms have access to, making investors question even further U.S. AI firms’ pledges to spend billions of dollars on cutting-edge chips.

DeepSeek said in a GitHub post published on Saturday that assuming the cost of renting one H800 chip is $2 per hour, the total daily inference cost for its V3 and R1 models is $87,072. In contrast, the theoretical daily revenue generated by these models is $562,027, leading to a cost-profit ratio of 545%. In a year this would add up to just over $200 million in revenue.

However, the firm added that its “actual revenue is substantially lower” because the cost of using its V3 model is lower than the R1 model, only some services are monetized as web and app access remain free, and developers pay less during off-peak hours.



Source

Trump readies blanket tariffs as he brushes off inflation worries
World

Trump readies blanket tariffs as he brushes off inflation worries

US President Donald Trump during a cabinet meeting at the White House in Washington, DC, US, on Tuesday, July 8, 2025. Aaron Schwartz/CNP/Bloomberg via Getty Images President Donald Trump on Thursday said that he plans to impose blanket tariffs of 15% or 20% on most trade partners, dismissing concerns that further tariffs could negatively impact the stock […]

Read More
CNBC Daily Open: Building renovations might be another front in Trump’s attacks on Powell
World

CNBC Daily Open: Building renovations might be another front in Trump’s attacks on Powell

Construction on the Marriner S. Eccles Federal Reserve building in Washington, DC, US, on Wednesday, June 25, 2025. Al Drago | Bloomberg | Getty Images Homo economicus, or the “economic man,” is an idea that depicts humans as rational beings. This assumption has been used to construct models of the economy and, more broadly, society. […]

Read More
Trump announces 35% tariffs on Canada starting Aug. 1
World

Trump announces 35% tariffs on Canada starting Aug. 1

U.S. President Donald Trump and Canada’s Prime Minister Mark Carney talk during a family photo at the G7 Summit in Kananaskis, Alberta, Canada, June 16, 2025. Amber Bracken | Reuters U.S. President Donald Trump on Thursday announced a 35% tariff on Canadian imports, starting Aug. 1, citing that Ottawa had retaliated with tariffs against Washington. […]

Read More