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Maybe the Chinese are playing the long game by trying to bankrupt the US competition? Because there's no way this is financially viable.
by margorczynski 4mo ago
Maybe the Chinese are playing the long game by trying to bankrupt the US competition? Because there's no way this is financially viable.
- ecommerceguy 4mo agoSmall team, cheap electricity, very efficient models. Many western companies operate at a loss to gain market share. Why can't the Chinese?
- tencentshill 4mo agoFederal ban incoming then. They did it with cars already.
- dyauspitr 4mo agoThey’re going to have to. It’s $0.87 vs $30 It’s going to be hard to enforce it for most consumers though. It’s only going to apply to large corporations in effect. That being said for coding and most actual “frontier” purposes the American models leave Deepseek in the dust.
- presto8 4mo agoWon't that be impossible as long as VPN is viable?
- odie5533 4mo agoInference is cheap. I bet the financials of these Chinese companies are much saner looking than any of the big US AI companies which are bloated by investors.
- raincole 4mo agoDeepSeek is very likely selling tokens at a loss. There're many cloud providers that provide you with DeepSeek V4 Pro via API, and those services at least twice as expensive as DeepSeek itself.
- raincole 4mo ago^Sorry for this understatement. DeepSeek is actually selling tokens at a far cheaper price than my previous comment implied. DeepSeek V4 Pro price on OpenRouter: deepseek: $0.435 / $0.87 baidu/fp8: $1.521 / $3.042 novita/fp8: $1.64 / $3.38 Yup. DeepSeek either has next-generation hardware that somehow no one else has access to, or they're selling at a loss.
- throawayonthe 4mo ago> next-generation hardware that somehow no one else has access to not necessarily 'next-gen', but they've optimized for the Huawei Ascend 950 right? not a lot of those outside china at least
- surgical_fire 4mo agoI see no evidence anywhere that "inference is cheap". To my knowledge this is a myth being spread to pretend ChatGPT or Claude will one day make any economic sense. DeepSeek likely operates at a loss. How big the loss is anyone's guess. Meanwhile I am happy using their model. It is really good, to a point I forget I am not using Codex or Claude.
- deleted 4mo ago[deleted]
- zozbot234 4mo agoUS suppliers are fine and won't go bankrupt, they can just focus on serving bigger "Pro" class models from their large datacenters. In fact cheap AI makes the bigger and smarter models more useful because it's smart enough to draft a clear question to the model, which helps minimize wasted tokens.
- overfeed 4mo ago> US suppliers are fine and won't go bankrupt, they can just focus on serving... For a while, US automakers thought the same of Japanese, then Korean car manufacturers, and Musk laughed at Chinese EV makers in an interview >12 years ago. People learn and get better at making things until they catch up with the frontier.
- zozbot234 4mo agoChinese EV makers have a few interesting technologies especially wrt. batteries but they're still very far from catching up to the frontier in a general sense. From that narrow POV Musk was absolutely correct.
- overfeed 4mo agoEV =/= software-defined vehicle, and Chinese EVs are doing well in both areas
- govg 4mo agoWhat is the "frontier" in EVs that Chinese automakers are yet to achieve? And what automaker is at this so called frontier?
- dyauspitr 4mo agoWhat the hell are you talking about? They have batteries that charge 0-80% in 5 minutes even at -30F. More full featured EVs at half the price with similar acceleration rates and higher top speeds. Total ranges are comparable or better. What is this frontier you speak of? I think the only thing US companies are far ahead on is self driving.
- jdgoesmarching 4mo agoIf you think heavily subsidizing AI models isn’t financially viable, I have some bad news for you about US AI companies. Deepseek has made some incredible advancements in model efficiency, and more importantly actually publishes those advancements so everyone can benefit from them.
- overfeed 4mo ago> more importantly actually publishes those advancements so everyone can benefit from them. I suspect American inference providers implement the efficiency gains, and pad their margins rather than pass the savings along to the consumer.
- missedthecue 4mo agoDeepSeek hasn't raised enough money to be actively selling tokens at a loss. They have a small team, extremely low overhead relative to other labs, operate in a place with the essentially the cheapest commercial electricity rates in the world, and their architecture lends itself very well to cheap inference.
- kajman 4mo agoMaybe not. I don't see how US inference providers can compete anyway with commoditized models. Costs are out of control here and the infrastructure is way worse.
- dyauspitr 4mo agoFor sure. But also they’re building an electrostate with 100% electricity redundancy and dirt cheap electricity. They might actually be able to sustain this.
- try-working 4mo agoThey might be thinking, we already have the servers and the GPUs sitting there anyway so why not make full use of it? They're not even close to being at a mature state where they start to monetize.