Last Updated: February 2026

DeepSeek AI: What Australian Businesses Need to Know in 2026

DeepSeek has taken the AI world by storm — a Chinese artificial intelligence company producing models that rival OpenAI's ChatGPT and Anthropic's Claude at a fraction of the cost. But for Australian businesses, the picture is more nuanced than just performance benchmarks. Data privacy, regulatory concerns, and the realities of sending business data to servers in China make this a decision worth thinking through carefully. This guide breaks it all down from an Australian perspective.

What Is DeepSeek?

DeepSeek is a Chinese AI research company founded in 2023 by Liang Wenfeng, who also founded the quantitative hedge fund High-Flyer. Based in Hangzhou, China, DeepSeek builds large language models (LLMs) that compete directly with the best Western AI systems. What makes DeepSeek remarkable is its open-source approach — most of its models are released under the MIT licence, meaning anyone can download, modify, and deploy them. The company gained global attention in January 2025 when its R1 reasoning model matched OpenAI's o1 on key benchmarks while costing dramatically less to train.

Key facts about DeepSeek:

• Founded — 2023, Hangzhou, China
• Founder — Liang Wenfeng (also behind High-Flyer Capital)
• Business model — Open-source models with a hosted API service
• Funding — Backed by High-Flyer's profits; no external venture capital
• Licence — MIT (permissive open-source) for most models
• Headquarters — China, with servers located in mainland China

DeepSeek's approach has disrupted the assumption that only billion-dollar American labs can build frontier AI. Their efficiency — training competitive models for reportedly $5–6 million versus hundreds of millions for comparable Western models — has sent shockwaves through Silicon Valley and global markets.

How Does DeepSeek Compare to ChatGPT and Claude?

In terms of raw capability, DeepSeek's latest models are genuinely competitive with ChatGPT (GPT-4o) and Claude (Sonnet/Opus) across most benchmarks, particularly in coding, mathematics, and reasoning tasks. However, the user experience, ecosystem, and safety profiles differ significantly. Here's how they stack up for Australian business users.

Performance comparison:

• DeepSeek R1 — Matches OpenAI o1 on reasoning benchmarks; excels at maths and logic; open-source
• DeepSeek V3 — General-purpose model comparable to GPT-4o and Claude 3.5 Sonnet; strong at coding
• ChatGPT (GPT-4o/GPT-4.5) — Best all-rounder with the most polished user experience; massive plugin ecosystem
• Claude (Opus 4/Sonnet 4) — Strongest at long-form writing, analysis, and following complex instructions; best safety profile

Where DeepSeek wins:

• Price — Dramatically cheaper API access (more on this below)
• Open source — You can self-host and keep data entirely on your own infrastructure
• Coding tasks — DeepSeek V3 consistently scores at or above GPT-4o on coding benchmarks
• Reasoning — DeepSeek R1 is purpose-built for step-by-step logical reasoning

Where DeepSeek falls short:

• Content moderation — DeepSeek's models carry Chinese government censorship on sensitive political topics
• Ecosystem — No equivalent to ChatGPT's plugins, GPTs marketplace, or enterprise features
• Support — No local Australian support; documentation is thinner than OpenAI or Anthropic
• Safety research — OpenAI and Anthropic invest heavily in alignment research; DeepSeek's approach is less transparent

For most Australian businesses, the practical difference in model quality is small. The real differentiators are the ecosystem around the model, data handling, and support.

Is DeepSeek Safe for Australian Businesses?

This is the most important question, and the honest answer is: it depends on how you use it. If you're using DeepSeek's hosted API or chat interface (chat.deepseek.com), your data is sent to and stored on servers in mainland China, subject to Chinese data laws — including the People's Republic of China's national security laws that can compel companies to share data with authorities. For any business handling sensitive customer data, financial information, or proprietary IP, this is a material risk.

Data privacy concerns:

• Data storage — DeepSeek's privacy policy explicitly states data is stored on servers in the People's Republic of China
• Chinese data laws — China's National Intelligence Law (2017) requires organisations to "support, assist, and cooperate with national intelligence work"
• No Australian data residency — Unlike Microsoft (Azure OpenAI) or Google, DeepSeek offers no Australian or even Asia-Pacific data centres
• Government bans — Multiple Australian government departments have banned DeepSeek on official devices; Italy temporarily banned the app in early 2025
• OAIC guidance — The Office of the Australian Information Commissioner has flagged AI tools that transfer data overseas as requiring careful assessment under the Privacy Act

What this means practically:

• Don't use DeepSeek's hosted service for sensitive data — client information, financial records, health data, or proprietary business processes
• Self-hosting is the safe alternative — Because DeepSeek's models are open-source, you can run them on Australian cloud infrastructure (AWS Sydney, Azure Australia East) with full data sovereignty
• Internal/non-sensitive use may be acceptable — Drafting generic marketing copy, brainstorming, or learning about AI capabilities carries lower risk

The Australian Cyber Security Centre (ACSC) hasn't issued a specific directive on DeepSeek for private businesses, but the precedent set by government bans should inform your risk assessment.

What Are DeepSeek's Key Models?

DeepSeek offers a family of models optimised for different tasks, with DeepSeek-R1 and DeepSeek-V3 being the flagship offerings. Understanding which model does what helps you make smarter choices about when DeepSeek might (or might not) be the right tool.

Current model lineup:

• DeepSeek-V3 — The core general-purpose model. 671 billion parameters using a Mixture-of-Experts (MoE) architecture, meaning only a fraction of parameters activate per query, keeping it fast and efficient. Comparable to GPT-4o for everyday tasks including writing, coding, and analysis.

• DeepSeek-R1 — The reasoning specialist. Built on the V3 architecture but fine-tuned specifically for chain-of-thought reasoning. Shows its "thinking" process step by step. Matches OpenAI's o1 model on maths, science, and logic benchmarks. Released under MIT licence in January 2025.

• DeepSeek-R1 Distilled Models — Smaller, faster versions of R1 distilled into more compact architectures (1.5B to 70B parameters). These are practical for self-hosting on modest hardware and still deliver strong reasoning performance.

• DeepSeek-VL2 — A vision-language model that can understand images alongside text. Useful for tasks involving document analysis, image interpretation, and multimodal workflows.

• DeepSeek-Coder V2 — Specialised for software development. Supports 338 programming languages with a 128K token context window. Strong performance on code generation, debugging, and technical documentation.

• Janus-Pro — DeepSeek's multimodal model for both understanding and generating images. Represents their push into creative AI applications.

What's coming:

DeepSeek has signalled plans for a fully autonomous AI agent by late 2026, and ongoing improvements to their reasoning and multimodal capabilities. The pace of development is rapid.

How Does DeepSeek's Pricing Compare to Competitors?

DeepSeek is dramatically cheaper than its Western competitors — often 10 to 30 times less expensive for API access. This is one of its strongest selling points, particularly for businesses running high-volume AI workloads.

API pricing (as of early 2026):

• DeepSeek (V3/R1) — $0.07 per million input tokens (cache hit), $0.56 per million input tokens (cache miss), $1.68 per million output tokens
• OpenAI GPT-4o — $2.50 per million input tokens, $10.00 per million output tokens
• Anthropic Claude Sonnet 4 — $3.00 per million input tokens, $15.00 per million output tokens
• OpenAI o1 (reasoning) — $15.00 per million input tokens, $60.00 per million output tokens

Consumer subscription pricing:

• DeepSeek — Free (web/app), no paid tier currently
• ChatGPT Plus — US$20/month (~AU$31)
• Claude Pro — US$20/month (~AU$31)
• ChatGPT Team/Enterprise — US$25–60/user/month

What this means for Australian businesses:

If you're using AI APIs at scale — processing thousands of documents, running automated workflows, or building AI-powered products — DeepSeek's pricing advantage is enormous. A workflow costing $1,000/month on OpenAI might cost $50–100 on DeepSeek.

However, "cheapest" isn't always "best value." Factor in the cost of managing data privacy compliance, self-hosting infrastructure if needed, and the lack of enterprise support.

Should Australian Businesses Use DeepSeek?

The answer isn't a simple yes or no — it depends on your use case, risk tolerance, and technical capability. Here's a practical framework for Australian SMBs.

Use DeepSeek when:

• You can self-host — Running open-source models on Australian infrastructure eliminates data sovereignty concerns entirely
• Cost is critical — If you're processing high volumes and margins are tight, DeepSeek's API pricing is hard to beat
• The task is non-sensitive — Brainstorming, public content drafting, code prototyping, or learning exercises
• You need coding assistance — DeepSeek's coding models are genuinely excellent and the open-source nature means you can integrate them deeply into your dev workflow
• You're building AI products — The MIT licence means you can embed DeepSeek models in commercial products without licensing fees

Avoid DeepSeek (hosted API) when:

• Handling customer PII — Australian Privacy Principles require you to take reasonable steps to protect personal information; sending it to Chinese servers is difficult to justify
• Working with regulated data — Health, financial, legal, or government data should stay on compliant infrastructure
• You need enterprise support — No SLAs, no dedicated account management, no Australian presence
• Compliance matters — If your clients or industry require data residency in Australia or allied nations, DeepSeek's hosted service fails this test

The smart approach for most Australian businesses:

Use best-of-breed tools for each job. ChatGPT or Claude for sensitive business tasks with proper enterprise agreements. DeepSeek for cost-effective, non-sensitive workloads — ideally self-hosted. This isn't an either/or decision.

How Can You Try DeepSeek Safely?

The safest way to explore DeepSeek is through self-hosting on Australian infrastructure, but there are lower-barrier options for getting started. Here's a practical roadmap.

Option 1: Try the chat interface (low-risk exploration)

• Visit chat.deepseek.com and create a free account
• Use it only for non-sensitive queries — treat it like a public forum
• Great for evaluating model quality before committing further
• Remember: everything you type is stored on Chinese servers

Option 2: Use DeepSeek via a third-party provider

• Major cloud platforms (AWS Bedrock, Azure, Together AI) now offer DeepSeek models hosted on Western infrastructure
• This gives you DeepSeek's model quality with data residency in your preferred region
• Check that your provider offers an Australian region

Option 3: Self-host on Australian cloud

• Download DeepSeek models from Hugging Face
• Deploy on AWS Sydney (ap-southeast-2), Azure Australia East, or Google Cloud Australia
• Use tools like Ollama, vLLM, or Text Generation Inference for deployment
• Full data sovereignty — nothing leaves Australian infrastructure
• Requires technical expertise or a partner to set up

Option 4: Use through an AI automation partner

• Work with a specialist like Flowtivity who can set up DeepSeek (and other models) within compliant infrastructure
• Get the cost benefits without the technical overhead
• Ensure proper data handling from day one

Is DeepSeek Good for Coding and Technical Tasks?

DeepSeek is genuinely excellent for coding — arguably the best value proposition in AI for software development as of early 2026. DeepSeek-Coder V2 and the V3 base model consistently match or beat GPT-4o on code generation benchmarks, and the open-source nature makes it particularly attractive for developer workflows.

Strengths for coding:

• 338 programming languages supported with deep understanding of syntax and idioms
• 128K token context window — enough to process entire codebases
• Strong debugging capability — can identify and explain bugs in complex code
• Code review and refactoring — produces clean, well-structured suggestions
• Technical documentation — generates clear docs from code

Real-world applications for Australian tech businesses:

• Startup development — Dramatically reduce development costs by using DeepSeek for boilerplate code, testing, and documentation
• Legacy system modernisation — Analyse and help migrate older codebases (common in Australian enterprise)
• DevOps automation — Generate infrastructure-as-code, CI/CD pipelines, and deployment scripts
• Code review — Use as a second pair of eyes before human review

Important caveat: For production code in regulated industries (fintech, healthtech, government), consider whether using AI-generated code from any provider meets your compliance requirements. This applies equally to ChatGPT, Claude, and DeepSeek.

The Bigger Picture: How AI Competition Benefits Australian Businesses

DeepSeek's emergence is part of a broader trend that's genuinely good for Australian businesses — increased competition in AI is driving down prices, improving quality, and expanding access. Whether or not you use DeepSeek directly, its existence benefits you.

Why competition matters:

• Prices are falling — OpenAI and Anthropic have both reduced API prices in response to DeepSeek's aggressive pricing. This benefits everyone.
• Open source is winning — DeepSeek, Meta's Llama, and Mistral are proving that open-source models can match proprietary ones. This gives businesses more control and reduces vendor lock-in.
• Innovation is accelerating — The rivalry between American, Chinese, and European AI labs is producing breakthroughs faster than any single company could alone.
• Australian businesses have more choice — Two years ago, you were essentially choosing between OpenAI and Google. Now you have half a dozen frontier-quality options.

What Australian businesses should do:

• Stay informed — The AI landscape changes quarterly. What's true today may not be true in six months.
• Avoid vendor lock-in — Design your AI workflows to be model-agnostic where possible. If you build everything around one provider's API, switching costs are painful.
• Think about data governance now — Regardless of which AI you use, have a clear policy on what data goes where.
• Get expert guidance — The complexity of choosing, integrating, and governing AI tools is growing. A trusted advisor can save you time, money, and risk.

Frequently Asked Questions About DeepSeek for Australian Businesses

Is DeepSeek free to use?

Yes, DeepSeek's chat interface and app are free with no paid tier. The API is extremely affordable — starting at $0.07 per million input tokens with cache hits. The open-source models are completely free to download and self-host. This makes DeepSeek the most cost-effective option for businesses wanting to experiment with frontier AI.

Is DeepSeek banned in Australia?

DeepSeek is not banned for private use in Australia. However, several Australian government departments have restricted or banned its use on official devices due to data privacy concerns related to Chinese data storage. Private businesses can make their own risk assessment, but should be aware of the data sovereignty implications.

Can DeepSeek replace ChatGPT for my business?

For some use cases, yes. DeepSeek matches or exceeds ChatGPT's performance in coding, maths, and reasoning tasks at a fraction of the cost. However, ChatGPT offers a more mature ecosystem with enterprise features, plugins, and Western data handling. Most businesses benefit from using multiple AI tools strategically rather than relying on a single provider.

Is my data safe with DeepSeek?

If you use DeepSeek's hosted service (API or chat interface), your data is stored on servers in China and is subject to Chinese data laws. This is a genuine concern for sensitive business data. The safest approach is to self-host DeepSeek's open-source models on Australian infrastructure, giving you model quality without data sovereignty risks.

How does DeepSeek handle content moderation?

DeepSeek's models include content restrictions aligned with Chinese government regulations. This means certain political topics (Taiwan, Tiananmen Square, etc.) may receive censored or deflected responses. For business use, this rarely impacts practical tasks like coding, analysis, or content generation, but it's worth being aware of.

Navigate AI With Confidence

The AI landscape is complex and changing fast. DeepSeek is just one piece of a much larger puzzle — and making the right choices about which AI tools to use, how to use them safely, and how to get real business value requires expertise.

At Flowtivity, we help Australian SMBs cut through the noise. Whether you need help evaluating AI tools, building automation workflows, or ensuring your AI strategy is compliant and effective, we're here to guide you.

Book a free AI strategy call →

AJ Awan is the founder of Flowtivity — a former EY consultant with 9+ years of experience helping Australian businesses leverage technology for growth. Flowtivity specialises in AI automation and strategy for Australian SMBs.