Chinese startup DeepSeek has quietly released an update to its R1 inference model, designated R1-0528, on the Hugging Face platform. Although the company has yet to make an official announcement or provide detailed specifications, the new version of the model was immediately noticed – and for good reason.
In the latest LiveCodeBench ranking, which assesses AI models in terms of the quality of code generated, the DeepSeek R1-0528 ranked just behind OpenAI’s o4 mini and o3, and ahead of the Grok 3 mini from Elon Musk’s xAI and Alibaba’s Qwen 3. This is a strong indication that the Chinese startup is not only catching up with the US leaders, but can realistically compete with them.
DeepSeek’s success so far has been about more than just the quality of its models – the startup has shown that advanced AI can be created more cheaply and quickly, without infrastructure on the scale of Google or OpenAI. The launch of the R1 model in January this year caused a noticeable stir in the technology markets, with some listed AI companies outside China scoring declines. The model challenged previous dogma: that effective AI requires unlimited computing power and billions of dollars of investment.
Since then, Chinese companies such as Tencent and Alibaba have responded with their own models, signalling an intensification of the local AI arms race. Global players OpenAI and Google, on the other hand, have responded with price cuts and the introduction of lighter models, also indicating increasing pressure from smaller, more agile competitors.
All of this is playing out in the shadow of anticipation for the launch of the R2, the next generation DeepSeek model, which according to earlier leaks was due to debut in May. The delay may suggest that the company is aiming higher and is aiming not just to catch up with the leaders, but to overtake them.
Conclusions? DeepSeek is emerging as a symbol of a new era in AI – more decentralised, less capital-intensive and therefore more threatening to the existing hegemons. If R2 proves to be a breakthrough, the balance of power in the industry could be permanently altered.
