In a significant shift within the artificial intelligence landscape, DeepSeek is enabling Europe's tech startups to compete on a global scale. Hemanth Mandapati, CEO of German startup Novo AI, recently highlighted the ease of integrating DeepSeek's chatbots, noting the swift transition from OpenAI's ChatGPT just two weeks ago.
\"If you have built your application using OpenAI, you can easily migrate to the other ones … it took us minutes to switch,\" Mandapati shared during an interview at the GoWest conference for venture capitalists in Gothenburg, Sweden.
The rise of DeepSeek is transforming the AI sector by providing companies with access to advanced technology at a fraction of the cost. Interviews with over a dozen startup executives and investors reveal that DeepSeek not only offers affordability but also encourages other AI firms to enhance their models and reduce prices.
Mandapati emphasized the cost benefits, stating, \"There was an offer from DeepSeek which was five times lower than their actual prices. I am saving a lot of money, and users don't see any kind of difference.\"
European tech startups have historically lagged behind their U.S. counterparts in adopting new AI technologies, primarily due to challenges in securing funding. However, DeepSeek is poised to change this dynamic. Seena Rejal, Chief Commercial Officer of British firm NetMind.AI, an early adopter of DeepSeek, remarked, \"It marks a significant step forward in democratizing AI and leveling the playing field with Big Tech.\"
Analysts at Bernstein have estimated that DeepSeek's pricing is 20 to 40 times more affordable than equivalent models from OpenAI. While OpenAI charges $2.50 for 1 million input tokens, DeepSeek offers the same for just $0.014.
The investment landscape further underscores this shift. In 2024, venture capitalists poured nearly $100 billion into U.S. AI companies, compared to about $15.8 billion in Europe, according to PitchBook data. Initiatives like U.S. President Donald Trump's $500 billion AI project, Stargate, backed by giants like OpenAI, SoftBank, and Oracle, highlight the aggressive investment strategies in the U.S.
Meanwhile, Europe's investment in AI has been comparatively modest, with only France's Mistral making a mark among the top foundational model developers—a list dominated by powerhouses like OpenAI, Meta, Anthropic, and Google.
DeepSeek gained substantial attention after disclosing in a recent research paper that training its DeepSeek-V3 model required less than $6 million in computing power from Nvidia H800 chips. This efficiency has propelled DeepSeek past ChatGPT to become the top-rated productivity app on Apple's App Store.
Fabrizio Del Maffeo, CEO of Axelera AI, commented, \"This is a wake-up call that bigger isn't always better. By making models more attainable to everyone, the total cost of ownership and barriers to building innovative tech are lowered, which can be a catalyst for the whole industry.\"
While some analysts remain skeptical about DeepSeek's reported training costs, there is consensus that they are significantly lower than those of comparable American models. Ulrik R-T, CEO of Denmark's Empatik AI, expressed optimism, saying, \"I see DeepSeek as a tremendous opportunity for companies like ours. It showed that we do not need huge budgets to achieve our vision.\"
The competitive landscape is heating up, with Microsoft recently offering OpenAI's o1 reasoning model to all Copilot users for free, eliminating the usual $20-per-month subscription fee. This move signals the beginning of a price war in the AI industry, further fueled by DeepSeek's disruptive pricing strategy.
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DeepSeek helps Europe's tech firms catch up in global AI race
cgtn.com
