China’s DeepSeek trains Nvidia-powered R1 AI for just $294K: here’s what it means

China’s DeepSeek R1 shocks AI by training for $294K, rivaling costly Western models with efficiency. [https://invezz.com/wp-content/uploads/2025/09/DeepSeek.webp] China’s DeepSeek just shook up the AI world by revealing it trained its new R1 model for a jaw-dropping $294,000, a fraction of the eye-watering costs seen in the West. This move isn’t just about dollars; it puts DeepSeek at the heart of a generative AI revolution, where affordability meets cutting-edge performance and the global pecking order is suddenly in flux. DEEPSEEK’S COST-CRUSHING AI PROJECT: WHAT IT MEANS? The story behind DeepSeek’s latest leap is remarkable. Released in a peer-reviewed Nature paper this week, DeepSeek disclosed that training its “reasoning-centric” R1 model cost just $294,000, a stunning contrast to OpenAI and Google, whose efforts can run into hundreds of millions. The Hangzhou-based team relied on 512 of Nvidia’s H800 GPUs, a China-compliant chip designed for export during US tech restrictions, and used techniques like distillation, where the model learns from outputs of existing AIs to squeeze maximum value from every GPU hour. Open-source at its core and designed for efficiency, R1’s training regime included…