The AI reasoning model competition is heating up. With the emergence of OpenAI’s o1, the Chinese open-source DeepSeek-R1, and even s1, created for just $50, the landscape of the reasoning AI market is rapidly changing. The balance between cost and performance is the key issue.
OpenAI’s o1 is a reasoning-specific model released at the end of 2024. It showed a significant performance improvement over the existing GPT-4 in complex math problems and coding tasks. However, it has limitations in that the API cost is high and it is a closed-source model. For enterprise users, the cost burden is considerable.
DeepSeek-R1 is a reasoning model released as open source by Chinese AI startup DeepSeek. According to Clarifai’s 2026 analysis of open-source reasoning models, DeepSeek-R1 recorded performance close to o1 in math and science benchmarks. The biggest advantage is that it is open source. Anyone can download the model and run it on their own server, reducing concerns about data privacy.
The most groundbreaking is the s1 model. According to a TechCrunch report, researchers created a reasoning model comparable to o1 for less than $50. This was the result of fine-tuning a Qwen-based model with a small, high-quality dataset. This opens up the possibility of creating competitive AI models without huge capital.
According to ARC Prize’s comparative test, which comprehensively evaluated major AI reasoning models, there was no clear winner. Each model had different strengths depending on the type of task. o1 stood out in coding and mathematics, DeepSeek-R1 in scientific reasoning, and s1 in cost-effectiveness. Ultimately, the optimal choice depends on the use case and budget.
The reasoning AI market is no longer the exclusive domain of large corporations. The rise of open source and low-cost models is rapidly lowering the barriers to entry. In 2026, the commoditization of reasoning models is expected to accelerate, with cost-effectiveness becoming the core axis of competition rather than performance. I hope this trend will accelerate the democratization of AI.
FAQ
Q: What is the biggest difference between OpenAI o1 and DeepSeek-R1?
A: o1 is a closed-source commercial model that can only be used through an API, while DeepSeek-R1 is released as open source and can be freely operated on its own server. The performance is similar, but the accessibility and cost structure are fundamentally different.
Q: Was the s1 model really made for $50?
A: That’s right. The researchers fine-tuned it using a small, high-quality reasoning dataset based on the existing open-source model, Qwen. The training cost itself was less than $50, but this figure does not include the pre-training cost of the base model.
Q: Which reasoning model should I choose?
A: It depends on the use case. If you need a stable commercial service, o1 is suitable, if data sovereignty and customization are important, DeepSeek-R1 is suitable, and if you need a low-cost solution for research or experimentation, the s1 series of models is suitable.