Chinese AI Models Gain Ground with U.S. Companies as Cost Gap Widens

U.S. companies are increasingly adopting Chinese AI models from firms like DeepSeek and Z.ai, driven by costs 60-90% lower than U.S. rivals OpenAI and Anthropic. The performance gap has narrowed to just 6-9 months, prompting startups like Lindy to switch entirely and save millions. This trend, facilitated by open-source models, has led the U.S. government to consider new regulations on powerful AI and foreign alternatives.

Chinese AI model adoption

• ▪On the platform OpenRouter, Chinese AI models have accounted for over 30% of traffic each week since February 8
• ▪In its first week on the Vercel platform, Z.ai's GLM 5.2 model saw its daily token volume grow about 27x and its customer base grow about 80x
• ▪AI startup Lindy moved 100% of its traffic from Anthropic's Claude models to a model from the Chinese company DeepSeek
• ▪The average share of traffic for Chinese models on OpenRouter was 11% across the previous 12 months

Cost advantages over U.S. models

• ▪Lindy CEO Flo Crivello said the company's switch to DeepSeek will save it millions of dollars within months
• ▪According to OpenRouter employee Justin Summerville, Chinese open-source models can be 60% to 90% cheaper than leading models from OpenAI and Anthropic
• ▪Rising token prices for advanced models from U.S. AI labs are causing American companies to become more cost-conscious

Performance gap narrowing

• ▪Z.ai's GLM 5.2 model performed within one percentage point of Anthropic's Opus 4.8 on an agentic benchmark, at roughly one-fifth of the cost
• ▪The Brookings Institution's Kyle Chan estimates Chinese AI models are six to nine months behind top U.S. rivals in performance
• ▪A May report from the Center for AI Standards and Innovation (CAISI) found Chinese AI models trail leading U.S. models by about eight months

U.S. regulatory response

• ▪The U.S. administration is considering regulations for its most powerful AI models and ways to halt the adoption of overseas alternatives
• ▪In late June, OpenAI stated it would limit the rollout of a new set of models at the U.S. government's request

Open-source model strategy

• ▪Open-source and open-weight models, many of which are from Chinese companies, make parts of an AI model available for developers to use and modify
• ▪Open models contrast with closed, proprietary systems from companies like OpenAI, Anthropic, and Google