Chinese AI drives price competition among US labs

BEIJING – Artificial intelligence users are shopping around as US giants face fierce competition from Chinese rivals, and in Beijing’s tech district, drinkers at an AI-themed bar can even plug in to DeepSeek for free.

A new generation of cost-efficient, high-performance Chinese AI is putting pressure on Silicon Valley’s leading labs to lower prices to grab market share as they try to find ways to turn a profit.

ChatGPT maker OpenAI has slashed fees by 80% for its latest lightweight model “Luna”, and Anthropic has unveiled a model approaching its most powerful system’s performance at half the price. Meanwhile, some of China’s buzziest AI companies are raising fees as their open-source offerings gain traction among businesses and programmers worldwide.

DeepSeek – whose V4 Flash tops the usage leaderboard of technical platform OpenRouter – said last week it plans a “significant increase” in prices for programmers.

Thirsty Beijingers have another option: free AI for customers at AGI Bar, which opened last summer as a hub for developers, founders and investors. The bar is decorated with references to China’s AI boom, with logos of the country’s major labs on the walls and the menu full of jokes riffing on tech jargon.

Its signature drink AGI –“Artificial General Intelligence”, meaning future AI tools as clever as humans – is a glass almost entirely full of beer foam, a nod to the frothy hype rife in the industry.