Open Models · January 27, 2025 · 2 min read

DeepSeek R1 and the Economics of Open Reasoning Models

DeepSeek released R1, an open-weight reasoning model that delivered competitive performance at a striking cost point. It sent a clear signal: frontier-style reasoning is no longer the exclusive domain of a few closed labs.

Open weights change the calculus

Open models you can self-host change the build-vs-buy decision. For workloads with strict data-residency needs, high volume, or customization requirements, hosting an open model can be both cheaper and more controllable.

Trade-offs to weigh

Self-hosting brings responsibility: infrastructure, scaling, evaluation, and security. The right answer is rarely all-or-nothing — many teams blend hosted APIs and self-hosted open models depending on the task.

Our take: we help clients run honest cost and risk comparisons, then design hybrid architectures that use the right model for each job.