Chinese artificial intelligence companies are driving down costs to create competitive models, as they contend with US chip restrictions and smaller budgets than their Western counterparts.
Start-ups such as 01.ai and DeepSeek have reduced prices by adopting strategies such as focusing on smaller data sets to train AI models and hiring cheap but skilled computer engineers.
Bigger technology groups such as Alibaba, Baidu and ByteDance have also engaged in a pricing war to cut “inference” costs, the price of calling upon large language models to generate a response, by more than 90 per cent and to a fraction of that offered by US counterparts.
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