DeepSeek Aids European Tech Companies in Gaining Ground in the Worldwide AI Competition
DeepSeek is assisting European technology companies in closing the gap in the global AI competition.
TroibNews 
Hemanth Mandapati, CEO of the German startup Novo AI, has recently transitioned to using DeepSeek chatbots, opting for the Chinese AI model over 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 stated in an interview during the GoWest conference for venture capitalists taking place in Gothenburg, Sweden.
DeepSeek is making a significant impact on the AI landscape, providing companies with access to technology at a fraction of traditional costs, as indicated by insights from more than a dozen startup executives and investors. This shift has the potential to motivate other AI firms to enhance their offerings and reduce prices.
"There was an offer from DeepSeek which was five times lower than their actual prices," Mandapati commented. "I am saving a lot of money, and users don't see any kind of difference."
European tech startups have faced challenges in adopting new AI technologies at the same rate as their U.S. counterparts, who benefit from better funding opportunities. However, executives express optimism that DeepSeek could change the game.
"It marks a significant step forward in democratizing AI and leveling the playing field with Big Tech," remarked Seena Rejal, chief commercial officer of British firm NetMind.AI, which has also adopted DeepSeek early on.
According to analysts at Bernstein, DeepSeek's pricing is estimated to be 20 to 40 times cheaper than similar models from OpenAI.
OpenAI's rate is $2.50 for processing 1 million input tokens—units of data processed by their AI models—while DeepSeek's price for the same quantity is currently just $0.014.
In 2024, U.S. AI companies attracted nearly $100 billion in venture capital investment, while Europe garnered only about $15.8 billion, as reported by PitchBook.
On January 22, U.S. President Donald Trump unveiled a $500 billion AI initiative referred to as Stargate, a collaboration supported by OpenAI, SoftBank, and Oracle.
Investment in European AI has been more restrained.
Among foundational model developers, only France's Mistral stands out amidst a landscape largely dominated by OpenAI, Meta, Anthropic, and Google.
DeepSeek caught attention recently when it published research demonstrating that training its DeepSeek-V3 model required less than $6 million in computing power using Nvidia H800 chips. It has since surpassed ChatGPT to become the highest-rated productivity app on Apple's App Store.
"This is a wake-up call that bigger isn't always better," said Fabrizio Del Maffeo, CEO of Axelera AI. "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 skepticism remains about whether DeepSeek's training costs are genuinely as low as claimed, analysts concur that they are still significantly less than comparable models from American firms.
"I see DeepSeek as a tremendous opportunity for companies like ours," stated Ulrik R-T, CEO of Denmark's Empatik AI. "It showed that we do not need huge budgets to achieve our vision."
The price competition in the AI market appears to be underway.
Just last week, Microsoft announced that OpenAI's o1 reasoning model would be available for free to all Copilot users, waiving the usual $20-per-month subscription fee.
Debra A Smith contributed to this report for TROIB News
"If you have built your application using OpenAI, you can easily migrate to the other ones ... it took us minutes to switch," he stated in an interview during the GoWest conference for venture capitalists taking place in Gothenburg, Sweden.
DeepSeek is making a significant impact on the AI landscape, providing companies with access to technology at a fraction of traditional costs, as indicated by insights from more than a dozen startup executives and investors. This shift has the potential to motivate other AI firms to enhance their offerings and reduce prices.
"There was an offer from DeepSeek which was five times lower than their actual prices," Mandapati commented. "I am saving a lot of money, and users don't see any kind of difference."
European tech startups have faced challenges in adopting new AI technologies at the same rate as their U.S. counterparts, who benefit from better funding opportunities. However, executives express optimism that DeepSeek could change the game.
"It marks a significant step forward in democratizing AI and leveling the playing field with Big Tech," remarked Seena Rejal, chief commercial officer of British firm NetMind.AI, which has also adopted DeepSeek early on.
According to analysts at Bernstein, DeepSeek's pricing is estimated to be 20 to 40 times cheaper than similar models from OpenAI.
OpenAI's rate is $2.50 for processing 1 million input tokens—units of data processed by their AI models—while DeepSeek's price for the same quantity is currently just $0.014.
In 2024, U.S. AI companies attracted nearly $100 billion in venture capital investment, while Europe garnered only about $15.8 billion, as reported by PitchBook.
On January 22, U.S. President Donald Trump unveiled a $500 billion AI initiative referred to as Stargate, a collaboration supported by OpenAI, SoftBank, and Oracle.
Investment in European AI has been more restrained.
Among foundational model developers, only France's Mistral stands out amidst a landscape largely dominated by OpenAI, Meta, Anthropic, and Google.
DeepSeek caught attention recently when it published research demonstrating that training its DeepSeek-V3 model required less than $6 million in computing power using Nvidia H800 chips. It has since surpassed ChatGPT to become the highest-rated productivity app on Apple's App Store.
"This is a wake-up call that bigger isn't always better," said Fabrizio Del Maffeo, CEO of Axelera AI. "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 skepticism remains about whether DeepSeek's training costs are genuinely as low as claimed, analysts concur that they are still significantly less than comparable models from American firms.
"I see DeepSeek as a tremendous opportunity for companies like ours," stated Ulrik R-T, CEO of Denmark's Empatik AI. "It showed that we do not need huge budgets to achieve our vision."
The price competition in the AI market appears to be underway.
Just last week, Microsoft announced that OpenAI's o1 reasoning model would be available for free to all Copilot users, waiving the usual $20-per-month subscription fee.
Debra A Smith contributed to this report for TROIB News
