DeepSeek is making waves in the European tech scene by providing affordable AI solutions, helping startups catch up in the global AI race. 🌍🤖
Hemanth Mandapati, CEO of German startup Novo AI, was among the early adopters of DeepSeek's chatbots, switching from OpenAI's ChatGPT just two weeks ago. \"If you have built your application using OpenAI, you can easily migrate to the other ones … it took us minutes to switch,\" he shared at the GoWest conference for venture capitalists in Gothenburg, Sweden.
DeepSeek's emergence is reshaping the AI landscape by offering companies access to cutting-edge technology at a fraction of the cost. According to interviews with over a dozen startup executives and investors, this move not only makes AI more accessible but also pushes other firms to enhance their models and lower prices.
Mandapati emphasized the cost benefits, saying, \"There was an offer from DeepSeek which was five times lower than their actual prices. I am saving a lot of money, and users don't see any kind of difference.\"
European tech startups have often struggled to keep pace with their U.S. counterparts due to limited access to funding. However, executives believe that DeepSeek could be a game changer. Seena Rejal, Chief Commercial Officer of British firm NetMind.AI, another early adopter of DeepSeek, stated, \"It marks a significant step forward in democratizing AI and leveling the playing field with Big Tech.\"
Analysts at Bernstein estimate that DeepSeek's pricing is 20 to 40 times cheaper than equivalent models from OpenAI. While OpenAI charges $2.50 for 1 million input tokens, DeepSeek currently charges just $0.014 for the same amount.
Investment in AI reflects the competitive landscape, with venture capitalists pouring nearly $100 billion into U.S. AI companies in 2024, compared to about $15.8 billion in Europe, according to PitchBook data. Despite this, DeepSeek gained significant attention after revealing that training its DeepSeek-V3 model required less than $6 million worth of computing power from Nvidia H800 chips. This efficiency has helped DeepSeek overtake ChatGPT to become the top-rated productivity app on Apple's App Store.
Fabrizio Del Maffeo, CEO of Axelera AI, commented, \"This is a wake-up call that bigger isn't always better. By making models more attainable to everyone, the total cost of ownership and barriers to building innovative tech are lowered, which can be a catalyst for the whole industry.\"
While some analysts remain skeptical about DeepSeek's claimed training costs, they agree that the expenses are significantly lower than those of comparable American models. Ulrik R-T, CEO of Denmark's Empatik AI, added, \"I see DeepSeek as a tremendous opportunity for companies like ours. It showed that we do not need huge budgets to achieve our vision.\"
The price war in the AI sector may already be underway, with recent moves like Microsoft offering OpenAI's o1 reasoning model to all Copilot users for free, bypassing the usual $20-per-month subscription fee.
