DeepSek Gives European Technology Companies Opportunities To Compete In The Global AI Race

DepSek, much cheaper than ChatGPT (photo: x @deepseek_ai)

JAKARTA Germany's startup CEO, Novo AI, Hemanth Mandapati, became one of the early users of DeepSeek chatbot after switching from ChatGPT from OpenAI, two weeks ago.

"If you have built an app using OpenAI, you can easily migrate to other platforms ... we only need a few minutes to move on," he said in an interview at the GoWest conference for venture capital investors in Gothenburg, Sweden.

DeepSek's appearance changed the AI landscape by offering low-cost access to technology. In interviews with more than a dozen startup executives and investors, many say that DeepSek can encourage other AI companies to upgrade their models and lower prices.

"There is an offer from DeepSek that is five times lower than their normal price," Man found. "I saved a lot of money and users didn't see any difference."

Tech startups in Europe have difficulty adopting AI as quickly as US competitors due to limited access to funding. However, DeepSee can be a game changer.

"This is a big step in democratizing AI and equalizing opportunities with Big Tech," said Seena Rejal, UK company's Chief Commercial Officer NetMind.AI, which has also adopted DeepSeek.

According to analysts in Bernstein, the price of DeepSek is 20 to 40 times cheaper than the equivalent model of OpenAI.

Currently, OpenAI charges 2.5 US dollars per one million input tokens, while DeepSee is only 0.014 US dollars (Rp165) for the same number of tokens.

However, regulators are concerned about whether DeepSek copies OpenAI data or censors answers that could harm China's image. Investigations into DeepSek are ongoing in various European countries.

"Although DeepSek's future as a business is still difficult to predict, the impact on the industry has been widely felt," said Sanjot Malhi, a partner at the Northzone venture capital firm.

In 2024, more than $100 billion was invested in AI startups in the US, while Europe only received about 15.8 billion US dollars, according to PitchBook.

In comparison, US President Donald Trump has just announced a $500 billion AI project, called Stargate, backed by OpenAI, SoftBank, and Oracle.

Meanwhile, in Europe, only French startup Mistral is included in the list of leading AI models, which are still dominated by OpenAI, Meta, Anthropic, and Google.

DeepSek drew attention after reporting that DeepSek-V3 model training only required about $6 million in Nvidia H800 chip-based computing. Now, DeepSek has even surpassed ChatGPT as the top productivity app on the Apple App Store.

"This is a warning that bigger is not always better," said Axelera AI CEO Fabrizio Del Maffeo. "By making the model more affordable, the cost of developing innovative technology can be lower and trigger industrial acceleration."

AI price competition is starting to appear. Last week, Microsoft made the OpenAI's o1 reasoning model free for all Copilot users, which was previously charged a fee of $20 per month.

"AI is getting cheaper, so users will likely choose a more transparent platform, usually open source, even though it comes from China," Joachim Schellde said of Scale Capital.

However, large companies such as Nokia and SAP are still being careful.

"The cost is not the only factor," said Alexandru Voica, head of the corporation in Synthesia, a British AI startup worth $2.1 billion. "Another factor to consider is whether the platform has security certification, software ecosystem, and framework that allows integration with the company's system."

While startups with limited budgets are starting to move to DeepSek, tech giants are still waiting and observing the development of the global AI industry