The team at Novasky, a ”collaborative initiative led by students and advisors at UC Berkeley’s Sky Computing Lab,” has done what seemed impossible just months ago: They've created a high-performance AI reasoning model for under $450 in training costs.

Unlike traditional LLMs that simply predict the next word in a sentence, so-called “reasoning models” are designed to understand a problem, analyze different approaches to solve it, and execute the best solution. That makes these models harder to train and configure, because they must “reason” through the whole problem-solving process instead of just predicting the best response based on their training dataset.

That’s why a ChatGPT Pro subscription, which runs the latest o3 reasoning model, costs $200 a month—OpenAI argues that these models are expensive to train and run.

The new Novasky model, dubbed Sky-T1, is comparable to OpenAI’s first reasoning model, known as o1—aka Strawberry—which was released in September 2024, and costs users $20 a month. By comparison, Sky-T1 is a 32 billion parameter model capable of running locally on home computers—provided you have a beefy 24GB GPU, like an RTX 4090 or an older 3090 Ti. And it’s free.

We're not talking about some watered-down version. Sky-T1-32B-Pre...