While the US administration has described this development as alarming and a ‘wake up call’ for US tech firms it could benefit businesses across the EU and here in the UK.
DeepSeek is radically changing the AI landscape offering companies access to its technology at a fraction of the cost of US competitors, while potentially pushing other AI companies to improve their models and bring down prices.
Here in Europe start-ups have been much slower at adopting AI as has been the case in the US but now with DeepSeek cost savings could mean much greater adoption.
According to analysts at Bernstein DeepSeek's pricing is as much as 20 to 40 times cheaper than equivalent models from OpenAI, which charges $2.5 for 1 million input tokens, or units of data processed by the AI model. By comparison DeepSeek is currently charging $0.014 for the same number of tokens.
To date $100 billion has been invested by venture capitalists in AI companies in 2024 in the US. In the Europe the equivalent figure was just $15.8 billion.
While there are concerns around DeepSeek – e.g. security and software integration – it lowers the barriers to building more innovative technology and the need for huge budgets.
The cost of AI appears to be going only one way and that will be a real benefit to start-ups and SMEs here in Europe.
