Summary
Chinese AI startup DeepSeek initially claimed to have trained its competitive R1 model with only $6 million and 2,048 GPUs.
However, a SemiAnalysis report reveals the company has actually invested $1.6 billion in hardware and owns 50,000 Nvidia GPUs.
DeepSeek has also spent well over $500 million on AI development since its inception.
DeepSeek operates its own data centers and exclusively hires from China, offering top salaries.
The report suggests its success stems from major investments rather than radical efficiency, countering initial claims of disruptive cost reductions.
They may own 50,000 Nvidia GPUs, but if they only used 2,048 then it doesn’t really matter how many they own.
Also, the specific GPU is very important here. OpenAI is using top of the line GPUs, but due to trade restrictions Chinese companies can only get much less powerful chips.
The other 47,952 GPUs are mining bitcoin
More like: Mining the private data of Chinese citizens.