Comment by NitpickLawyer
9 days ago
Since the 3rd party providers on openrouter have all converged on much higher prices in serving these models (both mimo and dsv4), there's obviously a question on how/why are they lowering the prices so much.
It's possible they've finally integrated cheap(er) chinese chips. It's also possible they're just subsidising inference for real-world usage data. Interesting either way.
> how/why are they lowering the prices so much
Like I responded to someone else:
- Cheap electricity - Cheap, domestically produced GPUs - Efficiency research. (a lot of it from Deepseek's research)
Also, the Chinese government wants the AI to be as accessible as EVs so everyone will use it.
Also if this is on the path of anything the Chinese do in the physical goods world, inference will be rockbottom cheap in a few years because they'll invest in the hell out of energy, GPUs, research, etc. The same thing they did with EVs.
Only artificial barriers will keep people using some of the frontier stuff in a couple of years. No costs will justify.
> there's obviously a question on how/why are they lowering the prices so much.
Same reason they release some of the models for free: They are trying to capture market share.
The difference is that releasing the model for free doesn't have ongoing cost for the company. Providing cheap tokens is very expensive - specially if you don't have access to the latest transistor node chips. So I think the parent comment is right, there's something else at play allowing DS and Xiaomi to offer these nearly free tokens.
LLM providers can't "capture" anything. People loved Claude Code because it was cheap and good. Not cheap anymore? People switching to Codex, DS4 etc.
Their only moat is maybe being SOTA but that only lasts so long before everyone else catches up.
This is why they are pushing more for non-tech folks to use their products with desktop apps. They are not going to switch on a whim.
I mean there is a minor moat. Most people don't enjoy switching providers or models. If you can get people to trust you'll stay near frontier, they'll stick around even when you aren't the best. Claude is a prime example of this
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Electricity in China are much, much cheaper than in U.S.
Also, DSv4 has access to Huawei Ascend GPUs that have native FP4 that allows all-native FP4+FP8 mixed compute that is more efficient than emulated FP4. Less so for 3rd party providers.
National security, training data
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