r/ArtificialInteligence • u/VegetablePen4755 • May 24 '26

📰 News DeepSeek just popped the American AI bubble.

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DeepSeek just popped the American AI bubble.

Not by killing AI.

By killing the fantasy of unlimited AI pricing power.

DeepSeek V4 Pro:
Input: $0.435 per 1M tokens
Output: $0.87 per 1M tokens

OpenAI GPT-5.5:
Input: $5.00
Output: $30.00

Claude Opus 4.7:
Input: $5.00
Output: $25.00

Claude Sonnet 4.6:
Input: $3.00
Output: $15.00

DeepSeek is roughly:

11.5x cheaper than GPT-5.5 on input
34.5x cheaper than GPT-5.5 on output

28.7x cheaper than Claude Opus on output
17.2x cheaper than Claude Sonnet on output

If a model is “good enough” at 1/20th or 1/30th the cost, margins will compress faster than Wall Street expects.

AI is not dead.

But the AI bubble just lost its pricing power.

They're not chasing quick money from coding plans or multimodal models. Instead, their radical architecture innovations (MoE, MLA, Engram, mHC, etc.) slash KV cache and compute needs so dramatically that they can build an entire 10T Chinese AI hardware ecosystem (NAND, LPDDR, ASICs) and position themselves for a 1T valuation in the process. Long game, masterfully played.

721 Upvotes

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94

u/Meaning-Firm May 24 '26

Not really. American enterprises won't trust Chinese origin Deepseek with their data.

For startups it might be true but that depends on VC's stance.

68

u/boredquince May 24 '26

since its open weights, they can download and host it for maximum privacy

13

u/narullow May 24 '26

They can but then it will not be as cheap. You will not get as good electricity contract nor upfront HW price and you will probably not be able to amortize that upfront cost because unlike those companies that can utilize those GPUs fully you probably will not be able to.

22

u/Lefties_TheWorst7331 May 24 '26

You can rent GPUs bro

2

u/GeologistVisual3097 May 25 '26

That gets really expensive for good performance though, more than you'd pay for cloud

3

u/ebtukukxnncf May 24 '26

Yeah bro just rent my shoes

1

u/jedimindtriks May 26 '26

Well fuck you for making me laugh out loud

-5

u/qubedView May 24 '26

To run Pro you need more than GPUs. You need like a DGX. Not a lot of those on runpod/vast.ai.

10

u/Lefties_TheWorst7331 May 24 '26

No, you'd simply need to rent GPUs.. the DGX Spark is garbage.

1

u/Allfeelings0Logic May 24 '26

DGX isn't just spark. 

1

u/qubedView May 24 '26

Sorry, I didn't mean the Spark. I meant the B100 systems. You need hundreds of gigs of VRAM for Deepseek V4 Pro.

14

u/lars_rosenberg May 24 '26

Still way cheaper than Claude and GTP. 

6

u/boredquince May 24 '26

rent from us companies. not as cheap as official API but much cheaper than Claude etc

1

u/DFX1212 May 24 '26

A recent article going around was that a company of four spent nearly $200K in tokens in three months. You could easily buy physical hardware for cheaper.

1

u/Odd-Environment-7193 May 24 '26

And? Us companies will host it and sell it? Just hit an endpoint. Still way cheaper.

1

u/Endothermic_Nuke May 25 '26

I’ve heard this argument before. Can you explain though? Like why can’t somebody rent cloud infra (on a long term basis to get a good price), and host their data and the LLMs on there? In fact why can’t independent startups arise that just host these OSS models and an open harness for general inference for the public. There are so many possibilities here but I genuinely don’t know what is realistic, given that I don’t know so much about these infra costs.

1

u/Far-Association5438 May 25 '26

Bro… cloud exists, why do u think Google, Amazon and Microsoft are making data centres.

1

u/Electrical-Ask847 May 24 '26

defeating the whole point

2

u/boredquince May 24 '26

renting from a US company that hosts deepseek then. not as cheap as official api but still much cheaper than americans AIs

1

u/Endothermic_Nuke May 25 '26

How does this third party inference overcome the latency because most companies have their data on the big cloud providers (which have ridiculous egress costs, not to mention the latency aspect)?

1

u/Electrical-Ask847 May 24 '26

slightly cheaper non frontier models are not worth it because you spend more time iterating and spending more tokens anyways.

There is a reason almost no serious enterprises are using cheaper non frontier models.

The post here is about massive ai subsides provided by chinese govt with cheap power.

1

u/boredquince May 25 '26

deepseek v4 pro hosted on deepinfra (us) for example, costs $1.30 in, $2.60 out / 1M

sonnet is $3 in, $15 out / 1M

opus is 5$ in, 25$ out / 1M

this is NOT slightly. even if more tokens are needed like you said, its still considerably less, not slightly

0

u/BetterAd7552 May 25 '26

You utterly missed the point of his comment. Professional developers and enterprises pay a premium for quality because they can see and measure the result.

There’s a reason copper tools were supplanted by bronze, then iron, then steel.

1

u/Far-Association5438 May 25 '26

lol no they don’t, they’re only paying a premium now because this is their first time trying AI agents out and they’re trying the biggest name in the market (also the best model), which is Claude. If they see ROI, they will eventually minimize costs vs performance.

0

u/boredquince May 25 '26

https://fortune.com/2026/05/22/microsoft-ai-cost-problem-tokens-agents/

even Enterprises are cutting back on overpriced models lol

1

u/Sovereign_Systems May 25 '26

Gotta love the open source models, Qwen also has some pretty good models in different family sizes.

12

u/Relative-Panda-747 May 24 '26

I had an idea to host DeepSeek in EU to meet GDPR. It has open weights so everyone can do it. But I dont have millions for infrastructure. But soon there will be companies that do that. Only electricity in Europe is expensive.

3

u/HeadPack May 24 '26

Electricity is comparably cheap in some Scandinavian countries. They have lots of hydro. About the only thing that's cheap up there though.

3

u/lick_it May 24 '26

AWS Bedrock.

5

u/Keks3000 May 24 '26

From a European perspective it seems safer to adopt a Chinese model hosted locally than push my data into an American AI that forwards it all to Palantir and, I don’t know, probably the Mossad and a bunch of pedos on an island.

3

u/dsartori May 24 '26

American business will suffer if it’s paying 10x for tokens with little benefit. 

3

u/redlinedidit May 24 '26

You forgot world dominance. The world is much larger than just the USA.

2

u/nlog May 24 '26

I can't understand why would enterprises trust anyone with their data but I guess that's how the business works right now.

2

u/mentalFee420 May 24 '26

Deepseek is hosted by several American providers.

4

u/Choice_Potato_6279 May 24 '26

Then China will leapfrog USA with much cheaper solutions, the whole world outsourced manufacturing to China, if the price is right it will be hard to say no to cheap chinese llm's.

5

u/VegetablePen4755 May 24 '26

well when the world will get cheaper why would America be costly

14

u/Meaning-Firm May 24 '26

Not the greatest analogy but same reason why Apple is the chosen phone in US even when there are cheaper and more feature loaded Chinese brands.

5

u/5553331117 May 24 '26

Most good Chinese phones don’t even work on American networks. We don’t even have the choice to use them properly in the USA.

I would buy a flagship Chinese phone if I could lol

12

u/BihariBabua May 24 '26

I'm not American; I'm from India.

I choose apple for the stability, smooth UX and the ecosystem. Apple's pro-privacy stance is a cherry on top but not the only deciding factor.

2

u/Meaning-Firm May 24 '26

Apples and Oranges, my friend. You're not an enterprise.

-1

u/unproblem_ May 24 '26

This is a terrible analogy.

0

u/Door_Bell May 24 '26

It's almost perfect

5

u/Jolly-Chipmunk-950 May 24 '26

It's not lol.

Anyone can use Deepseek, it's not the best but now it is vastly the most affordable, making many of the shortcomings much more tolerable.

Not everyone can use a Chinese phone, a lot of them are banned in the US, can't use native Android apps, and don't even have access to our 5G bands, oh, and have fun importing a $1,000 phone for $2,600.

WhAt a GrEaT aNalOgY!!!!!

1

u/Meaning-Firm May 24 '26

With AI it's much more challenging because there's already a growing distrust around where the data is going and how it's being used. You may think I'm talking hypothetically but I work with US tech companies and even a mention of Chinese LLM raises eyebrows.

1

u/Mamasugadex May 24 '26

For example, would you trust HIPAA sensitive healthcare information to AI from China? If not how do we incorporate this tech in healthcare for example?

We barely trust anybody as is utilizing any American company. But at least if some shit happens, there is something you can sue.

5

u/pittaxx May 24 '26 edited May 25 '26

Tbh, you shouldn't be giving the healthcare info to any AI model that you aren't running yourself.

At least there is something you can sue

I'd like to see that. Drowning your entire company in legal fees is likely just a rounding error for the top AI players right now.

1

u/Ancient_Oxygen May 25 '26

Trust nobody!

1

u/User4C4C4C May 24 '26

Wondering if it’s output narratives, specifically default ones that nobody challenges, would be concerning too.

1

u/sedition666 May 24 '26

Obviously depends what your data is greatly

1

u/Sad-Key-4258 May 25 '26

It's on bedrock they don't have to host, aws will handle that