OpenAI's 'cost-effective' new AI model is here as pressure from DeepSeek heats up

• OpenAI introduced o3-mini, a cost-efficient reasoning AI model, on Friday.
• The release comes as DeepSeek's R1 model shakes up the tech industry.
• OpenAI said the o3-mini excels in science, math, and coding.

OpenAI's first small reasoning model is here just weeks after a Chinese AI startup emerged as a potential competitor to its artificial intelligence lineup.

The ChatGPT maker launched OpenAI o3-mini, its "most cost-efficient model" in its reasoning series, on Friday. The model was previewed in December, but the release date comes in the same week that DeepSeek's open-source R1 model disrupted Big Tech.

R1 prompted OpenAI to say it was investigating whether DeekSeek "may have inappropriately distilled" the tech company's models.

"We know that groups in the PRC (People's Republic of China) are actively working to use methods, including what's known as distillation, to try to replicate advanced US AI models," an OpenAI spokesperson previously told BI.

While analysts examined the investment strategies of companies like Meta and Microsoft during their earnings calls, the affordability and efficiency of R1 has raised questions.

Most companies have doubled down on investing heavily in AI, and it appears OpenAI is also beefing up its financial arsenal. The company is reportedly discussing a $25 billion investment from SoftBank in its latest funding round, which could give it a $300 billion valuation.

Like R1, o3-mini is meant to handle complex questions, and OpenAI says it's particularly strong in science, math, and coding. Developers can set reasoning to low, medium, or high, depending on how complicated the challenge is.

ChatGPT Plus, Team, and Pro users have access to o3-mini starting Friday, and free plan users can try it out using the "Reason" option.