China's DeepSeek Quietly Drops R1 AI Update That Nearly Matches OpenAI o4 Mini—And Beats Elon Musk's Grok 3 Mini

Chinese AI startup DeepSeek, which triggered a $600 billion drop in Nvidia Corporation's NVDA market value with the release of its R1 model in January, has quietly launched an updated version of its reasoning model.

What Happened: The model, dubbed R1-0528, was uploaded in the early hours of Thursday to the developer platform Hugging Face without a formal public announcement, reported Reuters.

Despite the low-key release, the model quickly gained attention.

On the LiveCodeBench leaderboard—a benchmark created by researchers from UC Berkeley, MIT and Cornell—R1-0528 ranked just behind OpenAI's o4 mini and o3 models in code generation.

It also outperformed xAI's Grok 3 mini and Alibaba Group Holdings's BABA Qwen 3, underscoring DeepSeek's rising status.

DeepSeek's more advanced model, R2, is still expected later this year, the report added.

Why It's Important: Following R1's release in January, major Chinese firms like Alibaba and Tencent Holdings TCEHY have launched models that they say outperform DeepSeek's.

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Alphabet Inc.'s GOOG GOOGL Google also rolled out lower-cost Gemini access tiers, while OpenAI reduced pricing and introduced its o3 Mini model, designed to operate with reduced computational demands.

Previously, Demis Hassabis, CEO of Google DeepMind, acknowledged DeepSeek's AI model as arguably the most impressive to emerge from China, while Alphabet CEO Sundar Pichai downplayed the threat posed by the startup.

After witnessing China's DeepSeek top the App Store with an AI product built by just 200 engineers, Microsoft Corporation MSFT CEO Satya Nadella reportedly pushed his teams to deliver results with similar speed and real-world impact.

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