DeepSeek vs OpenAI – A Detailed Comparison Of AI Giants

February 4, 2025
deepseek vs openai

The technology landscape of AI is ever-evolving, but the recent release of DeepSeek has taken the world by storm. Most tech enthusiasts consider this new model will offer strong competition to the already established OpenAI.

DeepSeek is a Chinese AI startup, and OpenAI is an American AI research lab. While both of them are based on advanced large language models (LLMs), there are significant differences in terms of approaches, costs, and philosophies.

What is DeepSeek?

DeepSeek is simply an AI startup founded in 2023 in Hangzhou, Zhejiang, China, by Liang Wenfeng. The founder’s idea behind DeepSeek was to launch open-source large language models.

Deepseek is largely centered around building modular and transparent AI solutions. It is highly adaptable which makes it a good-fit for healthcare and finance. This is because users have access to reasoning behind AI decisions with DeepSeek R1.

Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd. owns DeepSeek. The founder of the DeepSeek AI model, Liang Wenfeng, currently holds 84% of the technology via two shell corporations.

What are the key features of DeepSeek?

  • This AI model offers robust performance for simple as well as complex tasks. You can use DeepSeek R1 for handling composite reasoning and logical deductions.
  • It is multilingual, and the DeepSeek Coder model claims to understand and generate code in over 338 different languages.
  • DeepSeek in the AI industry focuses on providing greater transparency, which means users can analyze how the model provides answers.
  • Deepseek models can be customized to adapt to key business industry requirements.

Is DeepSeek free?

Yes, DeepSeek has been launched as an open-source AI. This means, its model weights and training methods can be accessed by anyone for free. Developers can examine, use and build upon this AI model.

What is OpenAI?

OpenAI is basically an AI research and deployment organization that was founded in 2015 by Elon Musk, Sam Altman, and others. Their mission is to benefit all of humanity with artificial general intelligence (AGI).

The company has successfully launched GPT models that can understand and generate human-like text. Some of the main GPT models released by OpenAI are GPT3, GPT4, and ChatGPT.

ChatGPT, which was released in November 2022, is a conversational AI model. It is based on OpenAI’s GPT-3 family of large language models. It is capable of successfully performing day-today tasks for various business industries like answering queries, writing application code, etc.

What are the key features of OpenAI?

  • GPT models come with advanced NLP capabilities. These models can comprehend and mimic human-like text with high accuracy.
  • OpenAI models are actively used for various creative and technical content needs. You can use it to write stories, poems and also for generating application code.
  • OpenAI o1 models are largely entrusted for summarizing text and translating languages.

DeepSeek vs OpenAI – Detailed Comparison

Feature DeepSeek  OpenAI
Founders Liang Wenfeng founded DeepSeek in 2023. Elon Musk, Sam Altman, et al founded OpenAI in 2015.
Mission Offer open-source AI to all Benefit humanity with artificial general intelligence
Initial Training Pure RL first (DeepSeek-R1-Zero) Their AI models are Pre-trained on massive datasets which is further fine-tuned using SFT before RL
Main Model DeepSeek-R1 GPT-4, o1-1217, etc.
Development Cost <$6 million More than hundreds of millions of dollars
Reasoning Capability It builds reasoning autonomously via RL DeepSeek enhances reasoning via SFT and CoT prompting techniques
Open-Source Completely open-source Proprietary based
Performance (Math) Scored 79.8% on AIME benchmark Scored 79.2% on AIME benchmark
API Pricing DeepSeek API is cheaper than OpenAI for users. OpenAI offers a tiered pricing structure for different models.
Target Audience Engineers, startups, small firms, and researchers. Large-scale businesses and established enterprises
  • Performance and Capabilities

While both OpenAI’s ChatGPT-4 and DeepSeek’s R1 models are well-equipped with advanced language understanding and generation capabilities, their proficiency differs in terms of applications.

ChatGPT-4 offers great accuracy in natural language processing tasks. The AI model is helpful with reasoning, mathematics solutions, and generating code.

DeepSeek-R1 is not far behind with exceptional performance in creative writing. The AI model can offer outputs that appear highly creative.

  • Computational Requirements and Energy Consumption

DeepSeek wins in the category of optimum use of resources. It was trained using approximately 2.78 million GPU hours on Nvidia H800 GPUs.

On the other hand, OpenAI opts for A100 or H100 GPUs for training models. However, GPT-4’s training was achieved with just around 60 million GPU hours. The AI model pulled off strikingly similar performance with low computational resources.

  • Cost of Model Training and Deployment

DeepSeek-R1 is cost-effective as the model training was achieved within $6 million. This is much less than OpenAI, which spends an estimated $100 million to $1 billion training similar models.

Moreover, DeepSeek-R1 is roughly considered 32.8 times cheaper than GPT-4 when processing both input and output tokens. This makes it much more cost-effective for large-scale token operations.

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  • Market Impact on Tech Industry Dynamics

Both the technologies had a significant impact on the tech industry. OpenAI’s launch influenced the tech market financially by generating immense interest in generative AI. It quickly attracted large investments into the field, driving up valuations for AI companies. Various established tech giants accelerated their own AI development efforts post OpenAI launch.

Similarly, the release of DeepSeek-R1 has led to several companies, such as Nvidia, Tesla, Amazon, and Microsoft, facing heavy market capitalization losses. As per the Australian Broadcasting Corporation, as much as billions of dollars were wiped off Wall Street in less than 24 hours after DeepSeek portrays clouds of uncertainty over investors.

  • DeepSeek vs. OpenAI pricing

OpenAI provides users with a tiered pricing structure. The final charges for the user depends on factors like model used and the volume of requests. The AI company has given free access to some of the models with limited functional features. Complete access with more advanced features and higher usage limits are available on a premium.

DeepSeek is more affordable than the pricing of OpenAI tools. For example, users can avail themselves of Deepseek R1 for up to 50 daily messages, which makes it a good fit for startups and smaller firms. Notably, DeepSeek API is also cheaper than OpenAI.

Conclusion

Both AI organizations are leading the technology industry by storm. They are likely to emphasize greater transparency and safety of their models. Companies trying to choose a suitable AI model for their daily applications need to weigh their requirements thoroughly. 

For example, leverage DeepSeek AI if you need to handle complex, independent decisions. This proves ideal for healthcare, finance, research, and software development industries.

On the other hand, OpenAI offers various versatile, scalable AI tools for content, AI chatbots, or coding assistance. Business industries like content generation, customer services, and education.

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