Comment by admiralrohan
9 days ago
Everyone already said what I wanted to say. That all US companies (OpenAI, Anthropic, Google, MS Copilot) have increased price recently while Chinese companies (Deepseek, Xiaomi) are reducing price.
The question is how they are managing to do so? They are supposed to struggle due to chip sanctions.
Secondly, why now? The US companies were supposed to subsidize too but now they are unable to keep up. Everyone going to usage based pricing, so it's unsustainable for them. They are well funded too.
If there are genuine hardware breakthrough reducing compute needs then that is good for the whole world I believe.
> They are supposed to struggle due to chip sanctions
As Jensen has been pointing out for almost a year now, these sanctions were ineffective and probably had the opposite effect of the desired goal.
The history is fairly long, but an inflection point could likely be traced to Trump v1 era DOJ enforcement on (among others) Huawei's CFO Meng Wanzhou in 2018. Huawei was hit with the (really big) stick in international transactions: OFAC violation accusations, and it was a seminal moment in the company's internal operations -- they concluded they needed a fully internal supply chain in China, and retooled for it. Meng Wanzhou cases in the US were eventually dismissed, but she was on house arrest in Canada through 2021 or so.
Fast forward to 2024 -- Huawei was culturally and technically ready to build AI accelerators -- one of the externalities of the sanctions was to provide additional benefit to Chinese companies for buying from Huawei; those economics seem to have provided a boost to on-shore development.
Competition I guess, they must be burning some resources to make this price reduction happen...
The state of the art models (mostly GPT 5.5, but also Gemini and Claude) are better so they cost more. Qwen 3.7 Max is their only direct competition and it is not any cheaper.
Are they?
I have been using DeepSeek, and I am finding it better than Claude or Codex, to be honest.
I don't see myself going back.
I love ds4, us models are better imo, but like 5% not 500% better, so the valuation doesn't really make sense
that being said, deepseek v4 needs to be on amazon bedrock to actually be feasible in the US Enterprise market and start driving other provider prices down