DeepSeek claims ‘theoretical’ profit margins of 545%

DeepSeek claims 545% profit margins but actual profits are much lower.

: DeepSeek claims a theoretical 545% profit margin for its AI models, though actual profits are much lower due to various factors. Theoretical daily revenue is calculated at $562,027 with an expense of $87,072, but nighttime discounts and free services contribute to a lower actual revenue. DeepSeek's claims arise amidst discussions on AI profitability, having previously challenged OpenAI on cost and performance benchmarks.

DeepSeek, a Chinese AI startup, declared theoretical profit margins of 545% based on speculative calculations of potential pricing scenarios. In reality, the actual revenue from their AI models is much lower due to factors like nighttime discounts and free services, which impact the overall profitability.

Calculated at a theoretical capacity, DeepSeek projects a daily revenue of $562,027 if using R1 pricing, against costs of $87,072 for GPU leases. However, the actual earnings fall short as many services remain unmonetized and pricing adjustments make real-world scenarios less profitable.

Amid ongoing debates about AI's cost efficiency and profitability, DeepSeek's claims highlight potential but are not reflective of present circumstances. Despite initial recognition, including overtaking OpenAI's ChatGPT in app rankings, the app fell behind competitors in productivity listings, illustrating the competitive nature of the AI landscape.

AIProfit MarginsDeepSeek