It’s been a bit over 150 days since the launch of the Chinese LLM DeepSeek R1 shook stock markets and the Western AI world. R1 was the first model to be publicly released that matched OpenAI’s reasoning behavior. However, much of this was overshadowed by the fear that DeepSeek (and China) would commoditize AI models given the extremely low price of $0.55 input/$2.19 output, undercutting the then SOTA model o1 by 90%+ on output token pricing. Reasoning model prices have dropped significantly since, with OpenAI recently dropping their flagship model price by 80%. R1 got an update as DeepSeek continued to scale RL after release. This resulted in the model improving in many domains, particularly coding. This continuous development and improvement is a hallmark of the new paradigm we previously covered. Consumer app traffic to DeepSeek spiked following release, resulting in a sharp increase in market share. Because Chinese usage is poorly tracked and Western labs are blocked in China, the numbers below understate DeepSeek’s total reach. However the explosive growth has not kept pace with other AI apps and DeepSeek market share has since declined.

Full in-depth : A look at DeepSeek’s impact on the AI model race, market share, and pricing, roughly 150 days after DeepSeek R1 shook stock markets and the Western AI world.