TL; DR
- DeepSeek R1, a new Chinese open-source AI company, rivals OpenAI’s o1 with similar performance but is 96.4% cheaper and essentially free.
- OpenAI’s new o3 mini model is available for free users but has significant limitations compared to DeepSeek’s unlimited access.
- DeepSeek R1 is open-source, cost-effective, and runs locally, making AI accessible for all.
You must’ve heard about OpenAI’s reasoning model, o1—the one that nailed the strawberry question. However, it was very expensive, at a whopping $200 per month. Well, here’s DeepSeek R1, an AI model that’s 96.4% cheaper than Open AI’s o1, but delivers almost the same performance.
What is DeepSeek R1?
DeepSeek is a Chinese AI startup, and their R1 model is gunning straight for OpenAI’s throne. And honestly? It’s got the chops. Imagine getting performance similar to OpenAI’s o1 or even the o1 Pro, but for free (or 6% the cost for the API). Or close to it.
DeepSeek lets you run R1 on your own machine—or the cloud if you’re into that. And yes, there’s even an app. I’ve used it, poked around, uploaded PDFs, and threw at it some questions. Did it hallucinate once or twice? Sure. But so does Open AI’s o1 model.
The Rise of DeepSeek R1
Unlike o1, which locks researchers out with a black-box approach, R1 offers transparency. It’s open-source, meaning developers can study, modify, and even fine-tune it freely under an MIT license. This openness has drawn praise from AI experts, many of whom describe it as the next big thing in AI.
While o1 Pro costs a steep $200/month, DeepSeek-R1 provides nearly the same functionality for free—or at an unbelievably low price. This has got a lot of users thinking on whether they should continue or cancel their $200 OpenAI subscriptions.
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Ace of All Trades?
DeepSeek-R1 excels in multiple domains:
Reasoning and Analytics: Matches o1 in chemistry, mathematics, and even coding challenges.


Efficient and Runs Locally: DeepSeek can run smoothly on devices with limited computational power, such as smartphones or personal laptops, thanks to “distilled” versions of the model. This means you can have models as powerful as ChatGPT 4o or Claude 3.5 running locally on your phone.
Versatility: Runs both locally and on servers, giving users control over their data and processes.
This flexibility extends to features like accessing the web, handling complex tasks, and processing uploaded PDFs, which it performs seamlessly. A real-world test—the “classic strawberry question”—proved its reasoning prowess.

However, as with most models, it occasionally hallucinates answers to abstract questions. But its ability to execute practical tasks outweighs these quirks. Some users have built Perplexity AI clones using DeepSeek AI within, guess what, just 1 hour.
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At Least 90% More Affordable Than OpenAI’s o1
One of DeepSeek-R1’s most game-changing aspects is its cost-effectiveness. For example, tasks that cost £300 on o1 can be executed for under $10 with R1. This affordability has made high-performance AI attainable for smaller businesses, researchers, and developers without significant budgets.
Model | Input API cache hit | Input API cache miss | Output API |
DeepSeek R1 | $0.14 / 1M tokens | $0.55 / 1M tokens | $2.19 / 1M tokens |
OpenAI o1 | $7.50 / 1M | $15.00 / 1M | $60.00 / 1M output tokens |

DeepSeek’s success is not just about technical breakthroughs but also about overcoming geopolitical challenges. Despite U.S. export restrictions on advanced AI chips, DeepSeek built R1 efficiently and affordably. This demonstrates that innovation is not solely dependent on massive budgets or cutting-edge hardware.

The AI community has taken notice, with users worldwide testing and integrating R1. Developers are using it to create tools like Perplexity AI clones, chat apps for PDF analysis, and browser-based AI solutions—all at remarkably lower costs and faster speeds.
OpenAI CEO Sam Altman has introduced o3 mini, a new reasoning model, now available for free. Plus-tier subscribers also benefit from extensive o3 mini usage.
However, while DeepSeek AI offers unlimited access, o3 mini comes with significant limitations. This still makes OpenAI more expensive than DeepSeek, which remains essentially free.

What’s Next for DeepSeek?

The potential applications for DeepSeek R1 are limitless. DeepSeek is transforming AI from an elite tool into a universal resource—accessible, affordable, and open for everyone. The question isn’t whether it will change the game. It already has.
In a world where AI seems to be getting more expensive and exclusive, DeepSeek feels like a breath of fresh air. Sure, it’s not perfect, but it’s close enough to make the big players nervous. And that’s saying something.
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Try It Yourself
If you haven’t checked it out yet, go to chat.deepseek.com and try DeepThink. You can also install the DeepSeek app available on the App Store and the Google Play Store. Let us know what you think of DeepSeek in the comments below.
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