Comment by rvz
3 hours ago
While Anthropic, OpenAI and Google continue to charge an expensive amount of $$$ for in/output per million tokens and Microsoft complaining that AI costs more than hiring humans [0] and changes their pricing, it appears that Jevons paradox applies only to Deepseek.
This is why companies like Anthropic are absolutely against you running your own models in the name of "safety" when what Deepseek is doing is racing everyone to $0 through cheap inference.
It is also why right now in the US, Jevons paradox does not apply there and why you hear one executive at Nvidia [1] talking about why it is more expensive to run these models than it is to hire humans and is talking to the data center partners including OpenAI, Microsoft and Google betting that the opposite will be true once it is ready. That could take years.
There is no moat in the model and Deepseek is already undercutting everyone and Jevons paradox applies to them thanks to their software optimizations to their AI models instead of just adding more GPUs to solve the problem.
Good.
They started with a well-timed sale right at the release of V4, when Anthropic was publically forced to admit they've been playing with the models in the background wasting peoples money, and Copilot pricing scheme changed pricing out top Opus models into higher tiers. DS sale got expanded to whole of May, as I'm sure they saw a trove of people feeding their tasks to them in parallel with their bad experience with Anthropic. This dynamic reaction to overall situation is refreshing to see.
>There is no moat in the model.
What's the "moat" in giving models away for free? Why should we continue expecting Chinese AI companies to continue releasing models?
The article is about the pricing of the flagship non-free DeepSeek model.
I can very easily imagine protectionism coming into play.
Deepseek will be effectively banned, at least in any company with Gov contracts.
Americans get to pay 4x as much for EVs, and 6x as much for LLM tokens.