---
title: "Cheaper Chinese AI models are winning over U.S. companies"
description: "As the cost of using the top American AI models from OpenAI and Anthropic climbs, a growing number of U.S. companies are turning to cheaper, openly available models from Chinese labs such as DeepSeek and Alibaba's Qwen, a shift that is reshaping the economics of the AI business even as it raises security and political questions."
category: "Business"
category_url: https://herald.la/category/business
author: "Naomi Fields"
published: 2026-07-07T09:54:00.000Z
updated: 2026-07-07T09:54:00.000Z
canonical: https://herald.la/article/cheaper-chinese-ai-models-are-winning-over-us-companies
tags: ["artificial-intelligence", "china", "deepseek", "openai", "anthropic"]
---
# Cheaper Chinese AI models are winning over U.S. companies

As the cost of using the top American AI models from OpenAI and Anthropic climbs, a growing number of U.S. companies are turning to cheaper, openly available models from Chinese labs such as DeepSeek and Alibaba's Qwen, a shift that is reshaping the economics of the AI business even as it raises security and political questions.

For all the attention paid to which AI model is smartest, many companies are increasingly asking a blunter question: which one is cheap enough. And more and more, the answer is coming from China.

## The price gap

Openly available Chinese models have become dramatically cheaper to run than the leading systems from OpenAI and Anthropic. In one example cited by [Rest of World](https://restofworld.org/2026/when-americans-choose-chinese-ai/), an hour of coding work that cost about $10 using Anthropic's Claude ran to less than 50 cents on China's DeepSeek, a roughly 95 percent saving.

For companies running AI at scale, those differences add up fast. Flo Crivello, whose company Lindy switched from Anthropic to DeepSeek, said the move saved "millions of dollars," arguing that not every task needs the most powerful, most expensive model. "You don't need God to write your email," he said, according to Rest of World, making the case for using cheaper models for routine work.

## Adoption is climbing

The usage data points the same way. On the developer platform Vercel, DeepSeek's share of tokens processed jumped from under 1 percent to about 17 percent in May, [Rest of World reported](https://restofworld.org/2026/when-americans-choose-chinese-ai/). On OpenRouter, which routes requests across many models, Chinese systems from DeepSeek, Tencent, Minimax and Xiaomi have become among the most popular. The appeal is not only price: because many of these models are released with open weights, companies can download and run them on their own infrastructure rather than paying per use.

## The catch

The turn toward Chinese models carries real complications. Companies weigh concerns about data security and censorship, and about the geopolitics of building on Chinese technology. Some have drawn political scrutiny: Anysphere, the maker of the popular coding tool Cursor, faced a congressional inquiry over its use of Chinese open models, [Rest of World reported](https://restofworld.org/2026/when-americans-choose-chinese-ai/).

Firms have looked for ways to manage the risk. Airbnb's chief executive, Brian Chesky, clarified that the company was not sending any data to the Chinese developers after using open models including Qwen and Kimi, and some companies access the models through U.S. cloud providers rather than directly, keeping data on domestic infrastructure.

## The bigger contest

The trend complicates a common assumption in the U.S.-China technology rivalry, that America's lead in frontier AI translates into commercial dominance. When a task does not require the very best model, businesses are increasingly routing it to the cheapest capable one, and Chinese labs, by giving their models away for others to run, are winning a large share of that everyday work. The most advanced systems may still come from American companies. But the price of intelligence is falling, and much of the pressure driving it down is coming from China.