DeepSeek’s ‘Theoretical’ Profit Margins Are Just That
Companies that want to make money from AI have to do a much better job explaining why customers should pay for these services.
Too good to be true.
Photographer: Andrea Verdelli/BloombergThe Chinese artificial intelligence startup that rocked global markets earlier this year with its low-cost and high-performance AI models has outlined a potential path to major profitability. The transparency is laudable — even if the operating word is “potential.”
Over the weekend, DeepSeek shared an eye-popping “theoretical” cost-profit margin of 545%. The revelation came as the closing update in the company’s weeklong show that gave the world an exceedingly rare look under the hood of an AI firm. On Saturday, it published a blogpost outlining its potential profit margins when looking at a 24-hour period of inferencing costs (essentially, the computing power and related real-time operating expenses) compared to user requests for its two latest models, V3 and R1.