DeepSeek claims ‘theoretical’ profit margins of 545%

Chinese AI startup DeepSeek recently declared that its AI models could be very profitable — with some asterisks. In a post on X, DeepSeek boasted that its online services have a “cost profit margin” of 545%. However, that margin is calculated based on “theoretical income.” It discussed these numbers in more detail at the end of a longer GitHub post outlining its approach to achieving “higher throughput and lower latency.” The company wrote that when it looks at usage of its V3 and R1 models during a 24-hour period, if that usage had all been billed using R1 pricing, DeepSeek would already have $562,027 in daily revenue. Meanwhile, the cost of leasing the necessary GPUs (graphics processing units) would have been just $87,072. The company admitted that its actual revenue is “substantially lower” for a variety of reasons, like nighttime discounts, lower pricing for V3, and the fact that “only a subset of services are monetized,” with web and app accessing remaining free. Of course, ... Read full article.