DeepSeek Unveils Ambitious ‘Theoretical’ Profit Margins of 545%
Chinese AI startup DeepSeek has made headlines by claiming its AI models could yield significant profits, boasting a “cost profit margin” of 545%. However, this figure comes with important caveats.
In a recent post on X, DeepSeek shared that the impressive margin is derived from “theoretical income." The company elaborated on this in a detailed GitHub post, discussing its strategy for achieving what it describes as “higher throughput and lower latency.” According to DeepSeek, if all services used its V3 and R1 model pricing for a full day, they could generate $562,027 in revenue, while leasing the essential GPUs would cost only $87,072.
Nonetheless, DeepSeek admits that its actual earnings are "substantially lower" due to various factors, including discounted rates for overnight usage and the fact that many services remain free, limiting revenue from monetized offerings. This raises questions about the practicality of their profit calculations, suggesting they are more optimistic projections than accurate representations of the company’s financial health at this time.
The company’s claims arise amid wider discussions about the financial viability of AI solutions. DeepSeek gained traction in January with a new model that reportedly performed comparably to OpenAI’s offerings at a lower cost. Despite challenges like U.S. trade restrictions on accessing advanced chips, DeepSeek has made a notable impact on the market, briefly overtaking OpenAI’s ChatGPT as the leading app on Apple’s App Store, although it has since slipped in the rankings.
For more information, you can check out DeepSeek’s analysis on GitHub and their official post on X.
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