Why is DeepSeek AI More Efficient than GPT-4? Here’s the Explanation!

Bittime - DeepSeek AI, an artificial intelligence startup from China, has succeeded in creating a model that is claimed to be 30 times more efficient than GPT-4. 

With an investment of just $5.6 million, DeepSeek AI is able to reduce operational costs and provide a cheaper alternative for AI users. 

Not surprisingly, the emergence of these platforms saw the American tech giant lose nearly $1 trillion in market capitalization. Then, why is DeepSeek AI more efficient than GPT-4? Read this article to find out more!

The Beginning of DeepSeek AI Popularity

DeepSeek AI was founded in May 2023 in Hangzhou, a city known as the e-commerce center in China. This startup was born from the High-Flyer company which has long experience in the fields of machine learning and artificial intelligence. 

High-Flyer has been developing the Fire-Flyer I and II supercomputers used in AI model training since 2020.

In November 2023, DeepSeek AI launched its first model that was directly compared to GPT-4 due to its comparable performance. 

These models are offered free for research and commercial use, making them even more attractive in the AI ​​market.

Read Also: 18 DeepSeek AI Facts You Need to Know 

Cost Comparison of DeepSeek AI vs GPT-4

One of the main factors that makes DeepSeek AI more attractive than GPT-4 is cost efficiency. 

DeepSeek AI only charges $2.19 to process one million tokens, much cheaper than OpenAI which charges $60 for the same volume. 

This competitive pricing policy is forcing companies like ByteDance, Tencent, Baidu, and Alibaba to lower their AI service rates in order to remain competitive.

DeepSeek AI Technology

DeepSeek AI's latest model, DeepSeek-R1, relies on reinforcement learning and "cold start" methods to increase efficiency in mathematical processing, programming, and logical reasoning.

One of its superior features is “Chain of Thought,” which allows the model to break down complex tasks into small steps, checking for errors at each stage, and providing more accurate answers. 

This approach imitates human thinking and makes DeepSeek AI smarter in solving problems. mThis model was also trained using 2048 Nvidia H800 accelerators consuming approximately 2.788 million GPU hours. 

In addition, DeepSeek AI also applies Multi-Token Prediction and FP8 technology to optimize hardware usage without significantly increasing computing requirements.

Read Also: XRP Price Prediction According to DeepSeek AI Until the End of 2025 

Eficiency Scheme of DeepSeek AI Model 

DeepSeek AI has an architecture with 671 billion parameters, but only 37 billion parameters are active in a single run. 

This is thanks to Mixture of Experts (MoE) technology, which allows AI models to remain scalable without increasing operational costs proportionally.

One other interesting innovation is the Group Relative Policy Optimization (GRPO) method. This method allows AI models to train without the need for a “critic” thereby drastically increasing learning efficiency. 

This approach is similar to the breakthroughs Google DeepMind made with AlphaZero in chess and Go.

Reaction to DeepSeek AI

The success of DeepSeek AI has received attention from various parties. Pavel Durov, founder of Telegram, attributes the success of this model to China's education system which emphasizes fierce competition, especially in the fields of mathematics and programming. 

According to Pavel Durov, this academic excellence provides a competitive advantage for AI developers in China.

Meanwhile, some experts are skeptical of DeepSeek AI's efficiency claims. Scale AI CEO Alexander Wang alleged that DeepSeek AI had around 50,000 Nvidia H100 chips, which violated US export rules. 

If this claim is true, then the development costs of DeepSeek V3 were much greater than the $5.6 million figure they announced.

Read Also: DeepSeek AI Trending, Be Careful of Lots of Scam Tokens! 

Controversy of DeepSeek AI

However, DeepSeek AI also faces criticism regarding data transparency and privacy. The R1 model is suspected of having a system of censorship of sensitive topics such as Tiananmen and human rights in China. 

Additionally, China-based data retention policies raise concerns regarding the security of user information abroad.

Additionally, DeepSeek AI's involvement in meetings with high-ranking Chinese government officials has led to speculation that the project is receiving support from the government in an effort to achieve technological independence. 

If true, this could be a strategy to circumvent trade sanctions imposed by the United States.

Read Also: The Influence of China's DeepSeek AI on the Crypto Market, Here's the Impact! 

DeepSeek AI vs GPT-4: AI Competition Gets Tighter

With the increasing competitiveness of DeepSeek AI, the global AI market is entering a new era. OpenAI is still the industry leader, but innovations from DeepSeek AI have changed the competitive dynamics. 

Companies like Meta are even starting to analyze AI models from China to develop their own technology.

DeepSeek AI shows that an efficiency and optimization-based approach can be a superior strategy in AI development, rather than relying solely on increasing computing power as many Western companies do. 

If this trend continues, competition between Chinese and American artificial intelligence will become increasingly intense in the near future.

Read Also: Bitcoin Down Today, Was It Caused by DeepSeek AI? 

DeepSeek AI FAQs

What is DeepSeek AI?

DeepSeek AI is an artificial intelligence from China that offers advanced AI solutions with lower costs and high efficiency, even able to compete with popular AI such as OpenAI and Google DeepMind.

Is DeepSeek AI Only Used in China?

No, although DeepSeek AI was developed in China, this technology has the potential to be used globally. Its increasing popularity shows its appeal in the international market.

How to Avoid DeepSeek AI Token Scam?

Always do research before investing and use platforms like Uniswap or DexScreener to check the credibility of a token.

How to Buy Crypto with Bittime

Want to trade sell buy Bitcoins and crypto investment easily? Bittime is here to help! As an Indonesian crypto exchange officially registered with Bappebti, Bittime ensures every transaction is safe and fast.

Start with registration and identity verification, then make a minimum deposit of IDR 10,000. After that, you can immediately buy your favorite digital assets!

Check the exchange rate BTC to IDR, ETH to IDR, SOL to IDR and other crypto assets to find out today's crypto market trends in real-time on Bittime.

Additionally, visit Bittime Blog to get various interesting updates and educational information about the world of crypto. Find trusted articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your knowledge in the world of crypto.

Reference

Coin Paper, DeepSeek Has Disrupted The Market: Why Chinese AI Turned Out To Be 30 Times More Efficient Than GPT-4, accessed January 31, 2025.

Author: IPR