bosscoder_logo
Right arrowTech Updates

DeepSeek R1: What it is and Why it Matters?

author image

Bosscoder Academy

Date: 31st January, 2025

feature image

Contents

    In 2022, ChatGPT set new AI standards. DeepSeek R1 made its entry into the AI sector in 2025 to become a leading force that transformed the entire field. A leading Chinese AI hedge fund developed this technology, which currently captures worldwide interest because of its rapid evolution and high-level capabilities.

    What makes DeepSeek-R1 so special? Let’s dive in!

    What exactly is DeepSeek?

    DeepSeek is a Chinese AI company that has developed an advanced reasoning model called DeepSeek-R1. 

    Unlike traditional large language models (LLMs), reasoning models don’t just predict the next word—they break down complex prompts into smaller parts, consider multiple solutions, and reason through problems before generating a response. This makes them more capable than standard AI models, especially when solving complex tasks that require deep thinking and logical deduction.

    DeepSeek-R1 is already being compared to some of the most powerful AI models, including OpenAI’s ChatGPT. But is it truly groundbreaking, or is it just another AI trying to replicate what Silicon Valley has already done?

    How Is DeepSeek R1 Different?


    Unlike regular AI systems, DeepSeek-R1 uses different thinking methods to find solutions. DeepSeek-R1 functions like a human mind by working through each step of a problem sequence for its answer delivery.

    We need to examine how DeepSeek compares to ChatGPT from OpenAI.


    Two advanced AI models from DeepSeek draw attention in the industry.

    • DeepSeek-V3: Operates as a large language model that drives all AI functions.
    • DeepSeek-R1: Model applies logical problem-solving methods to solve tasks.

    Unlike OpenAI's models, DeepSeek-V3 and R1 are open-source, so developers can change them as needed at no cost.

    Big changes exist because of these key areas.

    1. Model Size & Efficiency
    2. Cost Factor
    3. Pricing Comparison
    4. The Chip Controversy

    1. Model Size & Efficiency

    • The DeepSeek-V3 is a powerful AI model with 671 billion parameters.
    • The parameters of OpenAI’s latest model are said to be above a trillion, though the exact value is not clear.
    DeepSeek-R1 vs OpenAI O1DeepSeek-R1 vs OpenAI O1

    However, does it necessarily translate that having a bigger model means a better performance? Not always.

    • It directly compares with the OpenAI’s GPT-4o model in terms of reasoning.
    • It also boasts of good performance in other AI benchmark tests such as AIME 2024, Codeforces, MMLU, and SWE-bench.

    Though OpenAI’s model is much larger, DeepSeek proves that efficient can be hugely effective as being big.

    2. Cost Factor

    While it is a fact that using AI models can potentially enhance performance in industries, it is also worth knowing that it costs. And this is where DeepSeek stands out.

    • DeepSeek V3 training cost: Just $5.6 million
    • OpenAI’s GPT-4 training cost: Over $100 million

    It is estimated that overall expenditure on research, establishing, and enhancements of OpenAI could have exceeded $1 billion.

    Even Google’s Gemini AI and other more sophisticated models needed billions of dollars to develop, while DeepSeek developed its own low-cost model.

    Even when the total cost of DeepSeek is still higher than the training cost, DeepSeek offers solutions at a cheaper price as compared to other Western competitors.

    DeepSeek-R1 is occurring in terms of AI— are you ready for it? Upskill with expert-led courses in AI and software development at Bosscoder Academy. Start learning today!

    3. Pricing Comparison

    With the use of AI in business, cost differs regardless of the business type. Therefore, which of these two AI models is more cost-effective? It’s easier if we look at the cost for processing 1 million tokens—a token is the basic unit of measure when text is fed through an AI model.

    Deepseek Pricing

    DeepSeek-R1

    • $0.55 (₹45 approx.) for input
    • $2.19 (₹180 approx.) for output

    OpenAI o1

    • $15 (₹1,240 approx.) for input
    • $60 (₹4,960 approx.) for output

    GPT-4o Mini (Budget Version)

    • $0.15 (₹12 approx.) for input

    Clearly, DeepSeek is a cheaper approach, which makes the usage of artificial intelligence tools much more available for organizations and developers.

    4. The Chip Controversy

    However, the U.S. banned exporting advanced chips to China, DeepSeek stated that it has trained models using Nvidia’s H800 & A100 GPUs, which are legal in the United States.

    But here is the big question: how was DeepSeek able to train models with models if it did not have access to Nvidia’s H100 chips?

    The USA has not allowed China to purchase H100 GPUs, the same type of powerful chips that OpenAI uses for its models. Despite DeepSeek’s assurance that it operated the H800 & A100 chips legally, some experts dispute this.

    Some people believe that DeepSeek is using Chat GPT and Nvidia Chips? So, what does Nvidia say? Thus, they said that DeepSeek’s GPUs were legal.

    But is that the whole story? That remains unanswered.

    Is DeepSeek Just a Copycat?

    While others think that DeepSeek is just replicating an idea that was already given by OpenAI and other sources. But is that true?

    DeepSeek is not a product from OpenAI rather, it’s an open-source project, so the corresponding models can be enhanced by developers worldwide. This cost-effective strategy may disrupt the AI market and make complex AI instruments available for anyone.

    With its R1 reasoning model, DeepSeek isn’t simply copying OpenAI, it is competing against it.

    Final Thought

    DeepSeek operates as an AI disruptor instead of an ordinary AI model. It changes our understanding of future AI development through its affordable open-source model combined with its reasoning-based technology design. DeepSeek faces competition from OpenAI but succeed in demonstrating that cutting-edge innovation can happen without requiring excessive financial investment.

    DeepSeek is positioning itself as a formidable AI competitor, proving that innovation doesn’t require billion-dollar budgets. As AI continues evolving, the question remains—will open-source reasoning models like DeepSeek-R1 lead the future?"

    Upgrade your career option with the Artificial intelligence skills at Bosscoder Academy. Join our courses today!

    FAQs

    1. Is DeepSeek-R1 difficult to set up?

    Not at all! DeepSeek-R1 is designed to be user-friendly. It is easy to use because most of the operations can be done with mouse clicks, and the system provides instructions on how to set it up.

    2. Can DeepSeek-R1 work with other apps and devices?

    Yes, DeepSeek-R1 is easy to integrate with many apps and various devices since it is an open-source software. Since DeepSeek-R1 can be accessed on any platform, including smartphones, tablets, or PCs, it can be easily incorporated into any technology.

    3. Is my data safe with DeepSeek-R1?

    Absolutely. DeepSeek-R1 employs multiple layers of security system to safeguard your data and privacy. All your input data is encrypted and kept confidential.

    4. How much does DeepSeek-R1 cost?

    DeepSeek-R1 has varieties of pricing plans that are within affordable market price, thus making it easily accessible. It even offers a free trial so that you can use it and see for yourself that it is good.