DeepSeek announced to raise its API price tremendously
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aalexwwang about 7 hours ago 8 comments
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My take: this notice from DeepSeek might actually be a brilliant marketing move. The logic here is to urge users to ramp up their usage over the next 2 to 3 months. By the time the price hike actually kicks in, newer models will likely have already drawn users away, and whenever DeepSeek drops its next, even stronger model, the new price point won't feel nearly as steep. It’s a clever way to dodge the dilemma Kimi and GLM found themselves in. Let's wait and see how it plays out.
Discussion (8 Comments)Read Original on HackerNews
Chinese model providers are in a bind because charging a reasonable margin will put them in competition with all the neoclouds that host their model weights without the development cost. Their economics are far more challenging than OpenAI/Anthropic/Google, who already have thriving high revenue business and mountains of compute online or coming online.
DeepSeek is model that you can run anywhere, meaning that any datacenter/company could run it at a price that would give them a margin taking in account running costs of the datacenter + depreciation.
I'm very sure we're overbuilding capacity, and we'll find out around 2027.
Those open weights will become extremely attractive because all that datacenter extra capacity laying idle will be possible to be used by builders.
It may be the case that in 2027-2028 will be cheaper to start a new AI model company from scratch to compete with Anthropic/OpenAI as you'll be able to:
- the new company won't be tied to so much capital, debt and running costs
- get much cheaper datacenters to train than it is Today, as the big labs will be stuck with bad infra contracts
- have great engineers/researchers willing to jump ship because if Anthropic/OpenAI valuation falls, that will destroy their equity
- wide available chinese models to distill from, papers and ideas on how to acquire datasets
Anthropic/OpenAI are playing an extremely risky game, they need to greatly keep doubling their bets and delivering model big performance increments.
If they don't give us ASI/AGI in 2 years or find huge new markets, there's no way the economics will make sense.
The execs forgot why AI models even exist (like huge usage for the cyber models, or new types of models)...
AI models' usage is mostly tied to build Software Today, that's where the value really lies now.
If there isn't enough Software to be built as people claim to the rate they expect, eventually the supply of AI models will outstrip the demand.
You can't sell pick & shovels infinitely, AI models themselves are also in that category.
Eventually you need enough holes to be dug, and gold to be struck, and nobody knows what's that demand. (even though they built all that supply...)
So I think we should not limit our field of view on software development but on realms where ai software has not penetrated yet. That’s the blue ocean for ai business. The forth industry revolution hasn’t begun yet. The new steam engine powered textile machine is on the stage of developing and experiment yet.
My take: no
They are still pretty much competing for software development, you see only tiny verticals being tried by OpenAI and Anthropic, with Claude Design et al
This can be better done by other companies, with a fresh balance sheet, don't you think?
There'll be plenty of people at Anthropic and OpenAI opening those companies
So I think there’re huge opportunities for everyone involving in.
Talking back to deepseek’s announcement, I think it is smart and funny but we needn’t to be panic on this forecasted price rising at all. Just sit and relax, and wait for big news announced by other model players. At least glm 5.3 is on its way.