DeepSeek Claims Potential 545% Profit Margin on AI Services, Faces Profitability Questions

Chinese startup DeepSeek reported a potential 545% profit margin for its AI services based on theoretical calculations. The company estimated daily revenue of $562,027 from its R1 model, with GPU costs at $87,072. DeepSeek admits actual revenues are lower due to discounts and unmonetized features. The company's claims come amid industry debate over AI profitability, as firms like OpenAI invest heavily in infrastructure. DeepSeek gained attention for offering a model competitive with OpenAI at a lower cost, despite U.S. chip restrictions. DeepSeek's app briefly surpassed ChatGPT in the App Store but now ranks sixth in productivity.