Hemanth Mandapati, CEO of German startup Novo AI, recently switched from OpenAI’s ChatGPT to the Chinese AI model DeepSeek, highlighting how the transition took just minutes. This move is part of a broader trend as DeepSeek’s lower costs disrupt the AI industry, offering models up to 40 times cheaper than OpenAI. Mandapati shared that a DeepSeek offer was five times lower than its actual prices, resulting in significant savings without sacrificing performance.
The emergence of DeepSeek is gaining attention in Europe, where startups have struggled to match the pace of U.S. rivals. Many executives, like Seena Rejal of NetMind.AI, believe it levels the playing field with Big Tech. Analysts estimate DeepSeek’s pricing is drastically lower—$0.014 per 1 million input tokens compared to OpenAI’s $2.5.
However, regulatory concerns have surfaced over potential data copying and censorship, with investigations underway in several European countries. Despite these issues, industry leaders like Sanjot Malhi from Northzone believe DeepSeek’s cost model could significantly reshape the AI landscape, offering opportunities for smaller companies to innovate without massive budgets. As competition heats up, even major players like Microsoft are adjusting prices, signaling a broader shift in AI economics.