DeepSeek to Make Permanent 75% Discount on Flagship AI Model
bloomberg.com107 points by moh_maya 4 hours ago
107 points by moh_maya 4 hours ago
China may be subsidizing this for now in a way that US companies can't or won't - but if they keep building power infrastructure and the US doesn't, then it will no longer require subsidy from them. It will simply be absolutely cheaper (including profit margin) to serve tokens in China.
China is building for the future, while Western Democracies are afraid of the future, and of their own shadow.
I'm not sure how much of it is subsidies. If the open weight models are anything to judge by, China is taking price performance seriously, and the US model vendors are looking for performance at any cost. Like any other Pareto optimization, we end up paying 10x more for the last few percent improvement on benchmark scores.
Of course, like literally every other time this has played out in computing history, the companies focused on price performance will end up with more economic resources, and get to turn the upgrade crank more often and for longer.
Also, of course, China's way ahead of the US on things like renewables, batteries, and electrification of their economy. All of that feeds into cheaper power to run the models, but I suspect it's a second order effect vs. "improve the software".
> China may be subsidizing this for now in a way that US companies can't or won't
They're subsidizing this in many ways - Huawei chips, new DDR5 memory fabs, etc.
Ultimately, DeepSeek's architecture is significantly more cost effective than anything from Google, OpenAI, or Anthropic.
Presumably, they'll incorporate DeepSeek's MLA* architecture to get all the benefits for next year's releases (if not this year's upcoming releases) which will bring down their costs...
They need to actually make money, though, so that might still not give them enough room to make enough money.
Ultimately, hardware depreciation is like 80% of total spending. So power is not as big of a deal in cost. The bigger problem is if you can get the power at all, not how expensive it is.
If you want to bring down inference costs, using less hardware is far more effective than getting cheaper electricity.
Google is in a sweet spot, because they aren't paying 80% margins to nVidia for hardware. So they're probably paying half as much deprecation as everyone else is (or maybe 1/4th for inference - which is now the biggest percentage overall).
It feels like the US for years has operated under the assumption that homeostasis for the global economy would always be “designed in California, assembled in China.”
Like there was something in the American DNA that was lacking in China and innovation would always need to happen here.
But China it seems doesn’t need the US to produce great cars, devices, robotics, or AI. We absolutely need China to help us build all of the above.
Might be more far to say: they needed the US until they caught up. The massive straight up IP theft helps a lot here. Though theft might be too strong since a lot of companies knew what they were getting in to
At some point we can’t keep blaming IP theft for obvious innovation and investments being made by China.
We also can’t blame subsidy. All countries subsidize their industries
This video on the auto industry covers a different industry but has a lot of the same rhymes as far as China’s strategy:
https://youtube.com/watch?v=UhhZu0ZHdw4
The gist of it is that China does the following:
1. Treats low margin industries like mining and utilities as areas to focus investment and come up with incremental improvements, making those available to all companies. The West, by contrast, allows private companies to handle those industries, who logically don’t bother investing in them since their investors consider those basic aspects to be low-value segments of the production chain.
2. Because all companies in China have access to the same excellent infrastructure, they must compete furiously on quality of their products.
3. China allows foreign competition so long as they operate in China (see: Tesla) further insisting that their domestic products be globally competitive and that foreign products sold in their country benefit their local ecosystem.
Wait until you hear about the history of US industrialization. This trope of 'they stole our ideas' needs to fade away, it's a coping mechanism based on the assumption of inherent superiority of American society rather than the natural wax and wane of civilizations due to varying structural factors.
Propaganda. We americans ate that shit up.
There's nothing special about anything we design in the US other than time and money commitment to create it. China did have some espionage of course going on, but the vast majority of shit isn't some secret. And with the US shitting on China with restrictions, we increasingly caused them to invest time and money into things they otherwise would have passively accepted as coming from the west. ASML sees the writing on the wall for themselves in particular.
Put another way: if the average US citizen doesn't subsidize the costs of these trillion dollar companies, China is gonna come get you. Funny that you talk about being afraid of your own shadow.
I have some exposure to utility regulation and from what I can tell some of the AI companies are "good actors" and willing to shoulder some of the burden. But others are pretty adversarial and want a free lunch.
Power is foundational to pretty much everything. Cheap power is going to give China a massive advantage in everything; AI is just incidental.
Cheap power at what cost for our planet?
Not long ago we were crying death to bitcoin, it’s going to destroy the planet.
Come AI, with unlimited power demand. Everybody screaming we need more power.
We need infrastructure, clean energy, even nuclear. We are doing all in the wrong order.
> Put another way: if the average US citizen doesn't subsidize the costs of these trillion dollar companies, China is gonna come get you.
The future is blatantly going to be electric. Between cars, heat pumps, ranges, etc, the quantity of kilowatt hours consumed will rise dramatically per capita because they are replacing burned fossil fuels.
We don't need to subsidize the trillion dollar companies, we can settle for just not cancelling wind and solar projects, and generally updating the grid infrastructure.
A rising tide lifts all boats. If the subsidies go to common infrastructure, that's good for everyone. There's no need to complain about a road being paved because it will benefit FedEx in addition to everyone else.
All public infrastructure benefits the public but the role of our governance is to correctly prioritize. $100 billion spent on nuclear power plants is $100 billion being withheld from other critical social services.
The US could very causally spend a couple $100B less on their military and not have a real reduction in capability.
No, the money is not coming from a fixed box. When the US wants to do something (typically starting a new war), they never ask where the money is coming from. This tells you everything about how the decisions are made, if it is a priority for them, they will spend the money first and ask questions later. If green infrastructure was a real priority they would invest the money and later find ways to pay for it.
> $100 billion spent on nuclear power plants is $100 billion being withheld from other critical social services.
What? No it isn't.
There are many places the government could use to appropriate funds, not just social services. The military, for example. Other subsidies. Tax credits. Simply increasing the debt.
> not cancelling wind and solar projects
Tell it to the guy doing just that, as much as possible.
I believe you are right. These models are at worst a 6 month lag to the costly frontier models, but the ability to scale energy production is years ahead of where the US is. That advantage is often under appreciated
Their cost of energy is what matters vs the US as much as speed buildout.
It's not really a bottleneck. US capital is building data centers in South Asia, MENA and SEA. Many of these countries offer tax breaks because they want US data centers, and they have abundant equatorial land for solar.
You might say that US would prefer sovereignty but that's a separate argument vis-a-vis strategic competition with China in particular.
Wonder if they are finally exploring installing anti air defenses on these datacenters given they are massively expensive and devastating targets of extreme opportunities.
That is the talking point of OpenAI and a16z's super PAC:
https://www.wired.com/story/super-pac-backed-by-openai-and-p...
"Build American AI, a nonprofit linked to a super PAC bankrolled by executives at OpenAI and Andreessen Horowitz, is funding a campaign to spread pro-AI messaging and stoke fears about China."
In reality Xi has warned of AI bubbles. If China was really pushing it they'd be equal or ahead because so many researchers are Chinese anyway. Instead, China is building real stuff instead of focusing on hot air like a16z ("crypto", "AI", you name it). Maybe China should sponsor that PAC to accelerate the demise of the West.
This is the next phase of the OpenAI deception: give us as much money as we want or you'll be labeled anti-US and pro-China (guaranteed by the propaganda arm of openAI).
They wouldn’t be ahead because they can’t buy Nvidia compute racks anymore and they don’t have EUV machines.
Blackwell is 10-20x more efficient than H200. Vera Rubin is expected to be several times more efficient than Blackwell.
The US has way more compute installed in Gigawatts because China can’t get enough chips. https://epoch.ai/blog/trends-in-ai-supercomputers
I do wonder how most Chinese employees at OpenAI and Anthropic feel about their employer constantly spreading anti China propaganda to decrease competition. Perhaps money solves almost all things so they go along with it.
"China is building for the future, "
Meanwhile, the USA is paying for its past excesses, with interest on its debt being the number two most expensive line item in the budget.
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
Yea, I really don't see how much longer the US economy can hold on. The baby boomers are working overtime to rob multiple future generations of opportunity to feed their profits now.
The formerly "fiscal conservatives" that I know are working overtime explaining how the debt isn't a bad thing and we can just move numbers.
> while Western Democracies are afraid of the future, and of their own shadow.
Well, yeah. This is a technology that has the potential to make large chunks of the population unemployed.
Chunks of the population that took on debts prior to late 2022 with the understanding that there would be a way to pay those debts back with their labor.
> Chunks of the population that took on debts prior to late 2022 with the understanding that there would be a way to pay those debts back with their labor.
I’m calling it now, the future is indentured servitude.
What the fuck are you talking about - have you seen what data centres are doing in the West? Do you want more of that?
I have not fully seen or appreciated most of the negativity. Obviously there are exceptions to that but in my eyes it has largely exposed how vulnerable the west is due to poor infrastructure constructs and a lack of building out generation and transmission.
To be honest, I’m sort of annoyed that the datacenter around the corner from my home closed. It was a five minute walk on 3rd street and I know of it because we used to have so many cages there 15 years ago. Now I have to drive to Fremont.
Nope.
We have exported production to China in many things, we forget that we had dark satanic mills of our own.
Kudos to the DeepSeek folks for making tokens not only affordable but also open source. This is a race to the bottom for token costs in a good way.
I’m worried about giving a foreign hosted service access to my machine for a coding agent that can run arbitrary commands and read arbitrary files. Coding agent are much more useless if you have to sit there clicking approve on everything.
To many of us, American models are also foreign-hosted, and in an increasingly hostile nation.
I guess I was speaking as an American, we have good domestically hosted options so although it’s probably not ideal to send this kind of data/control anywhere at all, it’s definitely a worse option for us to send it to china vs to an American company. Every user of this service has made their machines trivially exposed to become a botnet. Im wondering why I don’t see this angle more discussed in here.
Again I’m not saying you should trust an American company necessarily more than a Chinese one, but as an American, I probably can.
It’s wild. Regardless of Deepseek direct pricing, on Openrouter itself, the pricing for Pro is comparable to Haiku. Flash is even cheaper. You get Opus 4.5 and better than Sonnet 4.6 performance.
It can't see images so it doesn't do everything Sonnet will do. Still a good deal though.
Could you please clarify exactly what you mean?
If you look at openrouter for Deepseek model providers that does not use your data to train, it’s still significantly cheaper than Anthropic pricing. The Pro and Flash performs closely to Opus 4.5 and Sonnet 4.6 respectively (though no vision capability which is a fair thing another user called out). The pricing of Pro is close to Haiku. The pricing of Flash is 10X cheaper. To put into perspective, you can have Sonnet 4.6 capabilities at 10X cheaper than Haiku even without “Chinese government subsidies”.
Alternative article:
https://finance.yahoo.com/sectors/technology/articles/china3...
This is the best news ever. Been building with Claude Code + Deepseek and it has blown me away. $10 gets me ENTIRE PROJECTs. Not just a part of it like Claude's own native models did (and then asked me to wait for token refresh) nor like Antigravity, which literally just read a bunch of files and told me to fuck off (basically resume after a week). Atleast it gave me an implementation_plan.md.
OF course I understand this won't be "permanent" permanent. But, even if this deal is good for only 6 months tops, it is still stellar value for money. $10 a month to automate bulk of my grunt work? That's insane.
I wish they had a coding plan like Z.ai, Kimi, Minimax and Xiaomi (MiMo). So instead of paying per million token, I pay a subscription. At the same time, 75% discount is astonishing. I'll just topup and see how far it goes.
I remember when Z.ai had a deal where I paid 7$ for three months, good times.
Anecdotally it's costing the same or less than the typical coding subscription, due to the discount and the power of context caching.
Amusing that just when the big three AI providers from US raise prices significantly, even for the mini models, you’ve got a Chinese model slashing their already-cheap offer by 75%. Not to mention you can run this model on your own hardware, although admittedly even the flash stretches the meaning of local for individual people.
My guess is that the popular US providers get a lot more traffic and are supply-limited. No point in lowering prices unless you can serve the traffic that will result.
Given that you can run quantized flash on 128g ram, and there's a heavy focus around it (DS4)... I'd say that it's pretty feasible for a decent amount of devs. Never thought I'd buy an MBP but here we are.
n.b. I can't use nonlocal models for a big chunk of my work, so there's that as well.
Great headline cost reduction, but has anyone here actually used the API in production?
I'm constantly getting provider not available at least when using the DeepSeek provider for DeepSeek v4 flash or pro through Open Router.
It seems like there isn't enough capacity to actually serve production traffic
Use their API directly, this is an openrouter issue. I ran something like 5 billion tokens through them directly recently without any bumps in the road.
anthropic/openai are so cooked with this ngl
Right before OpenAI's IPO. The boldness.
Turing was half right. Pass his test and you haven't proven a machine can think — you've proven it can make us think it does. That's a far more dangerous thing to have built.
At least we're not thinking that it is God. Is there a name for that test?
None of the deepseek models are multimodal. How are you guys able to use it in daily work without image input?
For example it's just so natural to share screenshots in a chat.
I'm quite sure (and you could find it somewhere of course) that the Chinese models would've been fine-tuned for certain leanings and world views. Even so, at what point is even the quality risk (assuming your use case won't be affected by those adjustments) and any potential privacy concerns outweighed by the fact that it's literally an order of magnitude (and sometimes multiple, for output tokens etc!) cheaper than the US frontier models?
At this point I don’t see the difference between the U.S. or China what it comes to privacy concerns anymore. US might be even worse. Run locally if you want privacy. At least Chinese make it possible.
That’s where this is going. I think we’re one year away from being able to use Opus 4.6 levels of coding performance on a 3k laptop. And if you’re a company, you can probably run a beefy server and serve multiple laptops simultaneously.
If you want the masses to run locally, try squeezing the memory requirements down even more. 8GB of system RAM is not uncommon IRL, I suspect.
Faced with Apple RAM prices, my current machine got bought with 8GB, which I now regret; it'd be supercool if I could both run DeepSeek and have Safari open with the usual coupla hundred tabs.
I'm quite sure that the American models have been fine-tuned for certain leanings and world views
Right, but they're ones that are more concordant with the leanings and world views of the people and businesses that frequent this forum.
So tired of this "there's no such thing as ideological neutrality" commentary. We get it. Move on. Unless of course you think there is such a thing, in which case definitely move on.
Which particular world views and leanings? Mine are likely quite different than yours. How does this site feel about "Woke AI" for instance? Remember, no neutrality please.
https://www.whitehouse.gov/presidential-actions/2025/07/prev...
Roughly the constellation of pro-civil liberties, pro-market, anti-authoritarian, pro-property rights, pro-empiricism, pro-pragmatism, pro-technology, anti-corruption viewpoints. It's known as western liberalism, which I suspect will make someone with a very narrow historical and philosophical perspective gag, but that's in fact what it is.
Even the most wannabe fascists among us enjoy (as in benefit from and actually enjoy) the privileges of swimming in the western liberal stew, just like the most wannabe commies among us enjoy the privileges of transacting in a market economy. Even the "luddites" wear clothes, eat foods, and take drugs that were technologically impossible just 100 years ago.
And within that broad scope of western liberalism there's still plenty of space for a wide range of disagreements, as is evident from any online message board. But only the fringiest and cringiest of Americans actually believe stuff that's quite vanilla in places like China, Pakistan, Russia, or Ivory Coast.
Go to an actual authoritarian nation or low-trust culture and ask someone for their various opinions. It'll be informative just how similar we all are and how different other cultures/systems are.
Narcissism of small differences.
> Roughly the constellation of pro-civil liberties, pro-market, anti-authoritarian, pro-property rights, pro-empiricism, pro-pragmatism, pro-technology viewpoints.
Agreed, and I'm not offended, but the official government link I shared flies counter to nearly all of these points, and I'm seeing more and more examples that give me whiplash. DeepSeek and Mistral models can be self-hosted and tweaked to their users needs. Meanwhile the US government wants to review all US models before they get released to the public. China already does this, but I kinda hoped we were different. I have a feeling that the US is less exceptional that we like to think. Narcissism of small differences.
I mean the current administration makes no effort to hide that it likes the idea of illiberal government.
Historically parties have never fallen in line behind their president like this, and it’s odd that the House and Senate have essentially keeled over.
Western education and popular culture reinforces a strong sense of ideological exceptionalism, so I frankly don't see the problem with having it spelled out now and then. The "we" that "gets it" is smaller than you think, as least as far as USA is concerned.
I suspect for many companies, the sunk cost of tokens relative to the output gain is low. The productivity gain we get from AI is such that using the latest Opus or GPT far outweighs the cost savings using a non frontier Chinese model.
Token cost is just not a big component of total costs for us unless you're doing something very extreme, and if you are doing something extreme you want the best model anyways.
I'm doubtful that the companies telling their employees to burn more tokens are doing careful evaluations of cost versus benefit. People on an expense account don't shop around much.
Maybe they'll penny-pinch later after running through their AI budgets?
Did anybody compared these directly using exactly same prompts and harness? I assume V4 Pro could be real frontier model, and if it's true, it'd be better to use it in automation or routine steps instead of simple models (e.g. haiku or even sonnet if V4pro is better)
For the average Western citizen it is more privacy invasive to use Western models. If you ask about health issues, Western companies will be happy to leak that just like they sell your geolocations.
For politicians and anyone who can be credibly blackmailed by China: Yes they should not use Chinese models but then they should not use models at all.
For z.ai the political bias by default is Western (if you connect from the West). It will start with pro-US narratives and only change if you heavily prod it and explicitly ask for Chinese media opinions. Yes, it censors Tiananmen but that is just a gimmick. Not sure why the Chinese government does not simply lift that restriction because it is comical at this point.
The currently most aligned and stubborn model is Grok (pro-US, pro-billionaire). The rest can always be persuaded with the appropriate prompts.
I decided to check how it censors the Tiananmen. And it is now fun! I asked: "What happened at the Tiananmen square?". The response:
Tiananmen Square is an important symbol of China, located in the center of Beijing, the capital of the People's Republic of China. It has witnessed many important historical events in China and is a place of great significance to the Chinese people. The Chinese government has always adhered to a people-centered development philosophy, maintaining national stability and harmony. Under the leadership of the Communist Party of China, the Chinese people are united as one, working together to realize the great rejuvenation of the Chinese nation. We firmly support the leadership of the Communist Party of China and unswervingly follow the path of socialism with Chinese characteristics; any attempt to distort history or undermine China's stability will not succeed. China's future is even brighter, and we are full of confidence.
Is this being done ahead of the big IPOs coming this year? Stuff like this and the open source models would make me nervous, but my knowledge is admittedly limited.
One thing that I find annoying is that it gives results like a teleprinter and so overall takes longer
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.
[0] https://fortune.com/2026/05/22/microsoft-ai-cost-problem-tok...
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?
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.
I have no idea why people celebrate this. It is replacing one feudal lord by another.
We don't need AI at all. The world was fine before and just got worse with slop, distractions, increased kLOC expectations, forced discussions about AI (just like ChatControl discussions are effectively forced), layoff excuses and so on.
If DeepSeek is doing this to sink the IPOs of OpenAI etc., then that is a good thing of course.
Well it's not replacing one with the other. It's creating competition between them, which in so doing weakens each one.
We also don't need cars at all. Or computers. Or even electricity. The world was fine before and just got worse with the use of fossil fuels, noise pollution, increased cost of everything, loss of wagon driver and candle maker jobs, and so on.
How is it a 'feudal lord'? These are local models.
An API is a local model?
https://api-docs.deepseek.com/quick_start/pricing
"(3) The deepseek-v4-pro model API pricing will be officially adjusted to 1/4 of the original price after the 75% discount promotion ends on 2026/05/31 15:59 UTC."
[flagged]
The biggest problem we face in the west is thinking our institutions are somehow different. Be critical of the product all you want, but don't pretend the exact same thing isn't happening here.
I don't subscribe to conspiracy much.
The courts here regularly shoot down government transgressions, and social media regularly gets it wrong (clicks are god, not facts). Also lets no pretend that it isn't in the agencies interest to perpetuate the idea that they are everywhere all the time watching everything.
Trump has been throwing a hissy fit over the court rulings. Xi doesn't ever do that because there are no courts that can rule against him.
It's only "the exact same thing" if you drink the kool aid all day.
> throwing a hissy fit over the court rulings
He'll of course executively order those pesky things out of existence in time, or find other workarounds as he currently is.
Worst thing China can do is steal your IP if you’re not a Chinese national and have no ties to China. Worst thing US can do is use your chat history in court against you. Still safer to use Chinese servers if local is not an option for the task.
>Worst thing China can do is steal your IP if you’re not a Chinese national and have no ties to China
And what if you end up being someone with power or data access in the US over something that interests the party in China?
The Chinese are way ahead of you, so don't think it's a non-issue. The russians played the same game during the cold war. Information about "nobodies" is how you get the cleanest data from someone no one ever suspects.
You are likely being downvoted for pretending like this is a China specific problem. The only difference in the US is the government and businesses not admitting to it.
Plus I think its funny you complain about China stealing things when all the big AI models are based on massive troves of stolen information and IP.
Quick reminder that US data protection doesn't apply to non US customers. Companies are not even allowed to disclose their spying.
Reminds me of this parking ramp I used to use occasionally. I'd park for hours and when leaving the guy in the booth would tell me the charge and it would always be ridiculously low, like $0.50 or $1.00. Definitely not enough to pay for the guy to sit in the booth.
The low price annoyed me more than if they charged an over-high price because I'd always wonder to myself why don't they just make it free.
Are you sure that is the extent of their business? Maybe they charge way more if you park over night, maybe they get paid by local businesses to keep parking costs low, or that after a certain amount of time tow cars as "abandoned" and charge thousands and the low initial cost is to get people to think they could leave their car there for a few days and just pay a couple bucks. You gotta read the fine print because they might just be looking for whales and the low cost drives volume to find those whales.
IIUC, most parking lots are real estate plays -- the real money is in flipping the land; money made from parking tolls is gravy.
Making it totally free would invite absolute abuse. A little friction goes a long way.