Major companies turn to Chinese AI models as soaring AI costs force shift from US alternatives

Companies turn to Chinese AI models to cut costs

Companies from Silicon Valley to Europe are turning to Chinese AI models as they try to cut the cost of using the technology and reduce their dependence on US frontier labs. DoorDash, Siemens and Airbnb are among the groups that have adopted AI tools built in China, drawn by models that are cheaper, increasingly capable and, in some cases, easier to run on their own infrastructure. Chinese AI models from groups such as DeepSeek and Z.ai have rapidly overtaken US rivals in token consumption this year, according to OpenRouter, a platform that tracks the units of text, code or data processed by large language models. The shift has been driven largely by cost, as companies try to curb ballooning AI bills. But in Europe it has taken on a sharper geopolitical edge after the Trump administration last month imposed export controls on Anthropic's Mythos and Fable models, forcing businesses to confront the risks of depending on US technology. Chinese models are "the elephant in the room", said Eugene Cheah, chief executive and co-founder of Featherless AI. "Enterprises are starting to realise, 'Hey, we don't need the best model, we can use the faster, cheaper models'." DoorDash co-founder Andy Fang said last week that the food delivery group now delegated "lower-level work" to Kimi K2.6, a model by Chinese start-up Moonshot AI, and reserved Anthropic's Fable for only "the hardest work". The new combination "vastly outperform[ed] . . . at a cheaper cost" than a previous set-up that used only US frontier models from Anthropic, he said on X. German engineering group Siemens told the FT it wanted "flexibility" with its AI models. It uses a broad range, including tools from China's DeepSeek and Z.ai alongside models from US frontier labs and Nvidia as well as French AI group Mistral. Some companies have gone further, switching entirely to Chinese models. San Francisco-based start-up Lindy has moved from Anthropic's AI tools to DeepSeek's V4 model. Founder Flo Crivello last month on X hailed the shift as "transformative", saying it had saved the company millions of dollars and improved performance in "many core use cases". The shift has been accelerated by US-based AI groups including Anthropic and OpenAI moving some enterprise services from flat subscriptions to usage-based billing, which has dramatically increased the cost of using their models. At the same time, China's top models have improved, especially on coding tasks. The release in June of Z.ai's GLM-5.2 was praised by many Silicon Valley technologists and signalled that the gap between US and Chinese models was starting to narrow. "Many smart people/AI insiders are saying GLM-5.2 is the first Chinese AI model to match and often beat the American big lab public AI models with no compromises," wrote Marc Andreessen, co-founder of US venture capital group Andreessen Horowitz, in a post on X. "Enterprises have an incentive to shift some of their workload to cheaper models. Why would you pay a premium for Anthropic, OpenAI models when for a lot of the workloads you need, the Chinese models are generally workable?" said Sam Bresnick, a research fellow at Georgetown University's Center for Security and Emerging Technology. Another draw is that many of the leading Chinese AI tools are so-called open-weight models whose parameters are released publicly, meaning they can be hosted on company-managed servers and fine-tuned for specific uses. Airbnb said it used "a limited number of China-origin models" and was able to protect its data and operations by running them "only through approved US-based service providers". Proprietary models like OpenAI's ChatGPT and Anthropic's Claude tools are largely accessed through their creators' systems or third-party enterprise platforms. The best open-weight models are between 10 and 60 times cheaper than their proprietary equivalents, said Vipul Ved Prakash, chief executive and co-founder of Together AI, a cloud provider that helps companies access these tools. "Companies want to deploy them because they have more control and they can adapt the models to their own data," he said. In Europe, companies cite last year's US trade wars and the export controls on Anthropic's models as factors in moving away from US AI tools. While the export ban was overturned, it "changed the perception of the market forever," said Ben Grinnell, chief AI officer at Newton, a UK consultancy firm. "You can put Fable back in the market, but you can't put the genie back in the bottle." Tom Sheridan, US vice-president at venture capital firm RTP Global, said his advice to European start-ups has changed. "For European companies, a self-hosted Chinese model is the most secure choice versus the US one." Zoltan Bettenbuk, chief executive officer of German human resources start-up Timebutler, said that about six months ago his business started to offload some tasks from Anthropic's Claude to Alibaba's Qwen models in order to reduce its dependence on US frontier labs. "I still rely on the most capable flagship models currently because they do a great job, but if all hell breaks loose, I need to have another plan," he said. Platforms offering open-weight models say demand has risen in recent months. Featherless AI's Cheah said it had seen "exploding interest" since the US ban on exports of Fable, particularly from Europe. "People came banging on our door." He added that one customer had "origins near the Greenland area", which the US has threatened to take over. "He was like, 'I don't want to build on top of closed models, because who knows what happens with the geopolitics'." Aidan Gomez, chief executive of Canadian AI group Cohere, said companies were now realising the importance of sovereign AI for their business. "The Mythos ban was certainly the most tangible event, and people having their access revoked. It exposes the risk of relying on any one single entity for any of your workloads," he said. "Two years ago the main worry was China. Right now the bigger worry in Europe is the US," said Per Roman, founder of European venture capital firm Bullhound Capital. "That is staggering."

US Companies Are Realizing That Chinese AI Models Are Way Cheaper, Ditch American Ones

Can't-miss innovations from the bleeding edge of science and tech As corporate AI bills spiral out of control, many companies are beginning to ask themselves a simple question: why pay a pretty penny for the US's leading AI models when Chinese ones are far cheaper? Major companies like DoorDash, Airbnb, and Siemens are adopting Chinese AI tools, the Financial Times reports, attracted not only by their lower costs but their "open-weight" approach that allows them to be molded to each company's particular needs. According to data from OpenRouter, a platform that provides all-in-one access to major AI models and tracks their usage, leading Chinese models from DeepSeek and Z.ai have overtaken US equivalents like Anthropic's Claude and OpenAI's ChatGPT. Cost-cutting, it seems, trumps all geopolitical rivalries. Chinese models are "the elephant in the room," Eugene Cheah, CEO of the AI platform Featherless AI, told the FT. "Enterprises are starting to realize, 'Hey, we don't need the best model, we can use the faster, cheaper models.'" US-based AI models have frequently been seen as the most advanced, but that perception is shifting. The release of GLM-5.2 from the Chinese startup Z.ai last month caused a stir in Western tech circles, as major Silicon Valley figures hailed it as capable or nearly as capable as US systems despite being significantly cheaper to use. Cheap Chinese AI couldn't be coming at a more opportune moment. The corporate world, wooed by AI companies' promises of supercharging their productivity, has spent the past year deploying AI across its workforces, and many are being put off by the costs. One organization reportedly blew through $500 million in a month on Claude usage fees. That's an extreme outlier, but recent research from the Ramp AI Index found that the businesses most dedicated to AI are spending around $7,500 per employee every month on AI. Considering the culture around AI, it's no surprise why: some companies like Meta mandate their employees use AI systems as much as possible, factoring it into their performance reviews. Software engineers, now expected to produce more work than ever, often run multiple AI agents at the same time to complete tasks in the background. If companies are unwilling to crank back the AI knob, then the next best choice is to look for cheaper models. DoorDash cofounder Andy Fang said on X last week that it was saving a lot of money by having "lower-level work" performed by a model from the Chinese startup Moonshot AI. San Francisco startup Lindy has completely ditched Anthropic's AI tools in favor of DeepSeek's latest V4 models. "Enterprises have an incentive to shift some of their workload to cheaper models. Why would you pay a premium for Anthropic, OpenAI models when for a lot of the workloads you need, the Chinese models are generally workable?" Sam Bresnick, a research fellow at Georgetown University's Center for Security and Emerging Technology, told the FT. But cost isn't the only consideration: many Chinese models are "open-weight," meaning their parameters or values are entirely visible to the user. That allows an organization to mold a model to its specific needs -- and from a cybersecurity perspective, have more control and insight into how it might process sensitive company data. For foreign companies disillusioned by US leadership, the choice is even easier to make. There's less faith in the US as stewards of AI, especially after the Trump administration suspended access to Anthropic's Mythos model overseas. "The Mythos ban was certainly the most tangible event, and people having their access revoked," Aidan Gomez, CEO of the Canadian AI group Cohere, told the FT. "It exposes the risk of relying on any one single entity for any of your workloads."