Rosenblatt issues additional thoughts on DeepSeek

Published 30/01/2025, 18:30
© Reuters

Investing.com -- In a note to clients Thursday, Rosenblatt analysts offered further insights into DeepSeek-R1, the AI model that has drawn industry-wide attention for its low training costs and competitive performance. 

While the model was reportedly trained for less than $6 million in just two months, Rosenblatt says the actual cost was likely much higher. 

“All-in costs to train R1 are likely well above $6 million as it appears it was a refined version of the older R1-Zero,” the firm wrote.

A key concern raised by Rosenblatt is that DeepSeek-R1 appears to be ‘"distilled’ from larger, more capable model outputs such as OpenAI’s, and is in violation of service agreements.”

This is said to raise ethical and legal questions about its data sourcing and model development process. 

Additionally, Rosenblatt highlights transparency issues, noting that “DeepSeek/China have related issues on data collection, answers that favor China ‘views’, and lack of transparency.”

One of the most notable aspects of DeepSeek-R1 is its use of Test-Time scaling, a relatively new AI scaling approach that shifts compute resources away from training to the inference stage. 

“Test-Time scaling is believed to be the next wave of AI scaling as pre-training and post-training scaling are seeing diminishing returns,” Rosenblatt noted, adding that this method was “pushed by Nvidia (NASDAQ:NVDA) openly at CES recently.”

Rosenblatt expects Test-Time scaling to become a mainstream AI development strategy, stating that “most AI models will adapt to incorporate Test-Time scaling as a normal evolution on how to best balance where compute is located.” 

The firm also suggests that this shift will particularly benefit edge AI plays, as inference workloads gain more importance.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.