Europe eyes DeepSeek as a game changer in AI
The low-cost AI services challenge industry norms amidst regulatory concerns.
DeepSeek, a Chinese AI company, is shaking up the ΑΙ landscape by offering technology at a significantly lower cost compared to US competitors like OpenAI. Hemanth Mandapati, CEO of German startup Novo AI, recently switched to DeepSeek’s chatbot services, noting that the transition was quick and easy, and the cost savings were substantial. Mandapati reported that DeepSeek’s pricing was five times lower than what he was paying, with no noticeable difference in user performance. Analysts estimate that DeepSeek’s prices are 20 to 40 times cheaper than OpenAI’s, making it an attractive option for many startups.
The rise of DeepSeek is seen as a potential game-changer, particularly in Europe, where tech startups have struggled to compete with their US counterparts due to limited funding. Some believe DeepSeek’s low-cost offerings could democratise AI and help level the playing field with major tech companies. However, concerns about DeepSeek’s data practices, particularly regarding the potential copying of OpenAI’s data or censorship of Chinese content, have raised regulatory questions across Europe.
Despite scepticism around the actual cost of DeepSeek’s training and data usage, the company has garnered significant attention, especially after its model topped the productivity app rankings on the Apple App Store. Industry leaders argue that this shift in pricing could spark a broader movement in AI, with smaller companies gaining more access to advanced technologies without needing large budgets. This could foster innovation across the sector, although major corporations remain cautious due to security and integration concerns.
As the cost of AI continues to fall, competition is intensifying. For example, Microsoft recently made OpenAI’s reasoning model available for free to users of its Copilot platform. While price is becoming a dominant factor in AI adoption, industry experts suggest that trust and security certifications will still play a critical role for larger businesses when choosing their AI partners.