DeepSeek and Z.ai released models that work almost as well as OpenAI and Anthropic. U.S. companies looked at their bills and realized they could stop paying premium prices for the same f*cking chatbot.
This is what passes for competition now. Chinese companies build something cheaper. American companies pretend they care about innovation but really they just want to cut costs. CFOs are crying tears of joy because they can finally explain to the board why they're switching AI vendors without admitting they never understood what they were paying for in the first place.
OpenAI spent years telling everyone their models were worth whatever insane number appeared on the invoice. Turned out the number was negotiable once someone else showed up with a calculator and a shipping container full of GPUs.
The article calls these Chinese models "highly competitive." That's finance speak for "basically the same but cheaper." DeepSeek didn't reinvent mathematics. They just charged less money for matrix multiplication.
Retail traders are now panic-buying stocks in companies they think benefit from Chinese AI. They don't know which companies those are. They're just buying anything with "AI" in the press release and "China" in the supply chain. Some guy in Tampa just put his entire Roth IRA into a semiconductor ETF because his nephew told him DeepSeek runs on chips.
The real story is simpler. OpenAI got greedy. Anthropic matched their prices because that's what you do when someone else tests the market. Then Chinese companies built comparable models for half the cost and American procurement departments remembered they went to business school.
Capitalism worked exactly as designed and everyone's furious about it.
Photo by on Unsplash
Leave a Comment