Comment by kccqzy
13 hours ago
DeepSeek CEO has previously said that their finance team considers the optimal payback period for hardware purchase to be 10 months. That is, 10 months worth of revenue should be equal to the purchase price of the hardware. This doesn’t cover operational costs such as electricity. This is their method for API pricing.
Source: https://x.com/FuckAnthropic/article/2080268590033621295 (it’s a leaked meeting transcript so take it with a grain of salt)
Its not 10 months worth of revenue should be equal to purchase price. He is saying 10 months margin will cover the hardware cost, so revenue is ofcourse going to be higher, quote below.
"This is our API pricing. For our API pricing, we consider a reasonable profit to be roughly: we buy a batch of equipment from the market, and recoup the cost in ten months. I think that's a reasonable profit."
Isn't electricity a pretty major factor even over such a short fraction of the hardware's lifetime?
No, the absolute max power draw of these cards is like 1.5 kW, say 3 kW per card with mediocre cooling attached to a server. DCs get power in the 10c/kWh range at most. So 30c/card/hour, peanuts. And this is the most power hungry card at full tilt with mediocre cooling efficiency.
And thanks to China’s forward thinking on infrastructure and planning for oil shortages, both short term and long term, they will have access to the lowest energy costs most likely.
Ah, yes. I should have done the math before asking.