People keep asking why DeepSeek’s API is so cheap.
Some even make absurd claims that they’re dumping prices to corner the market.
No, the answer is simple: their model size is ridiculously small compared to its performance.
It's 10x smaller than Opus, and 5x smaller than Sonnet.
That means what used to require an 8-chip node can now run on a single chip.
And because it's so small, it runs extremely fast. You can multi-serve multiple users from a single chip while maintaining decent speeds.
By my math, they can handle 40x~ more traffic than Opus using the exact same compute.
This is where the competition is heading, and it’s why they can stay profitable even at these crazy prices.
