SINGAPORE – Companies in Singapore are calling for caution over the use of DeepSeek, even as they eye the cost-saving promises of the Chinese generative artificial intelligence (AI) model.

Major companies such as banks, consulting agencies and cyber-security companies have set clear rules on the use of generative AI models, essentially prohibiting employees from using such tools including DeepSeek for work, citing the need for due diligence.

DeepSeek shook the tech sector when it launched its latest R1 model in January, saying it rivalled technology built by ChatGPT maker OpenAI in terms of capabilities – but at a fraction of the cost.

The Chinese AI start-up claimed that the R1 cost only US$5.6 million (S$7.6 million) to train, compared with the hundreds of millions US tech giants have poured into training each of their large language models (LLMs).

Following its release, R1 topped download charts and caused US tech stocks to plunge, reflecting the undermined confidence in generative AI players such as OpenAI, Google and Amazon Web Services that have dominated the market.

Now, all eyes are on China’s model, with Singapore-based AI consumer insights platform Ai Palette estimating it could save companies between 40 per cent and 60 per cent in infrastructure costs, particularly from using high-end computing chips, to run large-scale LLMs.

Boston Consulting Group (BCG) said it has seen a surge in interest among clients about the potential use of DeepSeek AI in projects.

“The model stands out for being open-source, performing well across benchmarks and offering a significantly lower-cost alternative to competitors,” said Mr Hanno Stegmann, managing director and partner of BCG’s AI team.

Ms Tan Siew San, general manager at IBM Singapore, echoed his sentiments.

IBM’s recent study, published in December 2024, showed that close to half of more than 200 IT decision-makers here want to use more open-source AI technologies in 2025, citing faster software development and rapid innovation, among other reasons.

Specifically, the open-source method crowdsources ideas from third-party developers, not just in-house ones, to improve codes.

But it is worth waiting for a more thorough assessment of DeepSeek’s risks before deploying the model, Mr Stegmann said.

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