Artificial intelligence firm DeepSeek has sent shockwaves through the industry with its revelation of building a powerful AI model for just $6 million. The company’s decision to release its technology for free has significantly reduced the cost of running powerful AI models, altering the course of the industry.
Roadzen, a Nasdaq-listed auto insurance company, is one of the first to benefit from DeepSeek’s innovative model. By integrating the R1 model into its services, Roadzen has cut the time taken to resolve minor accident claims by 80%. According to CEO Rohan Malhotra, the company can now process claims more efficiently and cost-effectively.
Using DeepSeek’s AI model has reduced Roadzen’s quarterly costs by 50% compared to using OpenAI’s o1 model. The company also expects this change to boost its revenues, with estimates suggesting a 35% increase in revenue without changing pricing on the enterprise side.
Other companies, such as Ooda AI and CareYaya, have also adopted DeepSeek’s technology, citing significant cost savings. For example, Ooda AI reported a 90% reduction in costs after switching to DeepSeek’s R1 model, while CareYaya saw a 90% decrease in the average cost of appealing health insurance claims denials.
Despite the rapid decline in AI costs over the past two years, experts predict that rendering AI services to end users will continue to be relatively expensive. However, lower AI costs may enable automation in emerging markets, where labor costs are still competitive with AI systems today.
As DeepSeek continues to revolutionize the industry, its decision to release its technology for free has raised questions about the future of open-source innovation and the potential impact on traditional business models.
Source: https://www.cnbc.com/2025/02/04/how-deepseeks-new-ai-models-are-impacting-the-profits-of-global-companies.html