Industry Pioneer Reveals Chinese AI Competitor Allocates Only 2% of ChatGPT's Budget
Kai-Fu Lee has expressed skepticism regarding the sustainability of OpenAI’s model in comparison to the open-source alternative, DeepSeek. The AI landscape became more competitive in January when DeepSeek launched its open-source reasoning...
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Kai-Fu Lee has expressed skepticism regarding the sustainability of OpenAI’s model in comparison to the open-source alternative, DeepSeek.
The AI landscape became more competitive in January when DeepSeek launched its open-source reasoning AI model, R1, intensifying the rivalry between China and the US. Unlike ChatGPT, DeepSeek is available for free, contributing to its status as the most downloaded app on both Apple’s and Google’s app stores.
“In considering OpenAI’s $7 billion in operating costs anticipated for 2024, DeepSeek is likely functioning on only 2% of that operating expense,” stated Kai-Fu Lee during a recent interview with Bloomberg.
Lee is the founder of Sinovation Ventures, a venture capital firm dedicated to nurturing Chinese startups in the AI sector, and has established an AI institute to facilitate the integration of new technologies into traditional industries and promote AI-driven startups. His diverse experience includes roles as the founding director of Microsoft Research Asia and positions at Google and Apple.
“Is OpenAI’s model even sustainable?” he posed.
Lee highlighted that OpenAI is incurring annual losses of approximately $87 billion. He contrasted this with DeepSeek, which provides its services to developers at no charge or at a significantly reduced cost.
“With such a formidable competitor, I think Sam Altman is probably not sleeping well,” he commented, alluding to the CEO of OpenAI.
The venture investor and founder of 01. AI predicted that only three AI models—DeepSeek, Alibaba Group Holding, and ByteDance—would emerge as survivors from the domestic upheaval triggered by DeepSeek in China. He further noted that in the US, xAI, OpenAI, Google, and Anthropic could shape the future of the sector.
Lee underscored that pioneering models like ChatGPT have become commoditized, rendering OpenAI’s business model susceptible to the more economical options offered by open-source AI platforms like DeepSeek.
Sanya Singh for TROIB News
The AI landscape became more competitive in January when DeepSeek launched its open-source reasoning AI model, R1, intensifying the rivalry between China and the US. Unlike ChatGPT, DeepSeek is available for free, contributing to its status as the most downloaded app on both Apple’s and Google’s app stores.
“In considering OpenAI’s $7 billion in operating costs anticipated for 2024, DeepSeek is likely functioning on only 2% of that operating expense,” stated Kai-Fu Lee during a recent interview with Bloomberg.
Lee is the founder of Sinovation Ventures, a venture capital firm dedicated to nurturing Chinese startups in the AI sector, and has established an AI institute to facilitate the integration of new technologies into traditional industries and promote AI-driven startups. His diverse experience includes roles as the founding director of Microsoft Research Asia and positions at Google and Apple.
“Is OpenAI’s model even sustainable?” he posed.
Lee highlighted that OpenAI is incurring annual losses of approximately $87 billion. He contrasted this with DeepSeek, which provides its services to developers at no charge or at a significantly reduced cost.
“With such a formidable competitor, I think Sam Altman is probably not sleeping well,” he commented, alluding to the CEO of OpenAI.
The venture investor and founder of 01. AI predicted that only three AI models—DeepSeek, Alibaba Group Holding, and ByteDance—would emerge as survivors from the domestic upheaval triggered by DeepSeek in China. He further noted that in the US, xAI, OpenAI, Google, and Anthropic could shape the future of the sector.
Lee underscored that pioneering models like ChatGPT have become commoditized, rendering OpenAI’s business model susceptible to the more economical options offered by open-source AI platforms like DeepSeek.
Sanya Singh for TROIB News
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