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DeepSeek and the rise of open-source AI: A game-changer for businesses?

Open-source AI models like DeepSeek are emerging as powerful alternatives to proprietary solutions, offering businesses greater control, lower costs, and more flexibility while delivering competitive performance. 

January 31, 20253 Minutes to Read
With insights from

Tim Herfurth

Lead Data Scientist

Disclaimer

Recent reports have raised concerns about the security and governance of DeepSeek when using the company’s app or API. At Zühlke, we take these concerns seriously. In the blog post below, we highlight the benefits of deploying DeepSeek on-premise, ensuring full control over data and preventing external processing. Alternatively, trusted cloud environments like Azure or AWS offer security and scalability but involve data leaving the organisation’s infrastructure.

Zühlke remains vendor-independent and does not specifically promote the use of DeepSeek or any other AI model.

What is DeepSeek?

DeepSeek is an AI company making waves in the GenAI space. Since December 2024, it has introduced two large language models (LLMs) that have drawn significant attention.

DeepSeek-V3 is a large language model for advanced text generation, similar to ChatGPT. DeepSeek-R1 followed a month later, with stronger reasoning abilities, especially in math and coding. These models have gained interest for their competitive performance, efficiency, and open-source availability. 

How does DeepSeek compare to other GenAI models? 

DeepSeek’s latest models match leading alternatives like GPT-4o, Claude-3.5, and Llama-3.1 in benchmark tests. They handle text generation, reasoning, and logic tasks as well as – or better than – other top models.

What sets DeepSeek apart is efficiency. It delivers high performance while using fewer computational resources. Additionally, its open-source nature allows businesses to download and use the models themselves, even for commercial use. This makes DeepSeek a compelling alternative to proprietary AI solutions like GPT, Claude, and Gemini.

Is my data safe with DeepSeek?

DeepSeek provides both an app with a user interface and a developer API for using its models. Data entered through these services is processed externally, which may raise data privacy concerns. However, as we explain below, DeepSeek’s biggest advantage comes from self-hosting. Businesses can deploy the models in-house, ensuring full control over their data. No information needs to leave company infrastructure. 

DeepSeek: What does the ChatGPT alternative mean for businesses?

With the rapid advancement of generative AI, companies now have access to powerful open-source alternatives that rival the commercial GenAI models. This offers new strategic options for businesses looking to balance AI performance, cost efficiency, and operational control. 

Open-source models with permissive licenses like DeepSeek allow companies to run LLMs on their own hardware, independent of external cloud providers. Thereby, the high quality of these models means little to no cutbacks in performance. This is a major advantage for organisations with strict security, compliance, or operational requirements. 

Opportunities and advantages

  • More control, less risk

    Self-hosting open-source models gives businesses full control over their AI systems. Unlike proprietary APIs, where updates are rolled out silently and may affect model behaviour, locally deployed models ensure stability and predictability. Companies can decide when and how to update their models, avoiding unexpected shifts in performance.

    A major advantage of on-premise deployment is data privacy—critical for regulated industries like banking and healthcare. With a self-hosted model, sensitive information never leaves company infrastructure, ensuring compliance with strict data protection regulations.

Risks and considerations

  • Technical expertise and maintenance

    Deploying open-source LLMs requires a higher level of in-house expertise. Unlike managed AI solutions and APIs, DeepSeek does not offer built-in enterprise support or compliance tools. Companies must invest in AI and infrastructure expertise to ensure a seamless and compliant deployment.

    Beyond serving the LLM itself, building a robust AI solution often requires additional AI-powered tools for data processing. For retrieval-augmented generation (RAG) applications, this means integrating AI search and document intelligence capabilities. Replacing cloud-based services for these tasks adds another layer of complexity, but emerging on-premise solutions from providers like NVIDIA can help streamline deployment and management.

Conclusion

DeepSeek and other open-source AI models offer businesses a high-quality, cost-effective alternative to proprietary solutions. With the right strategy, companies can reduce costs, maintain flexibility, and avoid vendor lock-in.

What should I do next?

  • (Re-)Evaluate AI use cases: Identify where open-source models like DeepSeek can replace or complement existing solutions. Self-hosting can make solutions more viable and enable applications with high data security requirements.
  • Build flexibility: A GenAI platform lets you manage and monitor your AI solutions, stay adaptable and avoid vendor lock-in.
  • Plan for costs: Open-source models need setup but lower long-term expenses.
  • Ensure compliance: Establish security, monitoring, and governance for self-hosted AI.
  • Stay informed: Keep track of AI advancements to remain competitive.

“This trend in open-source AI is set to continue. For businesses, that’s good news. More control, lower costs, and adaptable solutions are now within reach. By acting strategically, companies can move beyond reacting to AI trends and start shaping their AI-driven future.” 

Here at Zühlke, we’re helping businesses across complex and regulated ecosystems to turn AI opportunities into value-driving use cases and scalable solutions. From strategy to implementation, we support businesses in developing responsible, scalable AI solutions. Discover our expertise in AI and data-driven solutions.

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