China’s DeepSeek R1 release is shaking AI market. In the recent few days there was a huge release of DeepSeek R1 LLM Open Source model from a Chinese company DeepSeek.

The model outperforms Open AI’s flagship o1 model in some evaluations and offers a drastic price cut per 1M token usage, being 20-40x cheaper than o1’s usage cost..

Of course there are significant privacy concerns regarding the sharing of US and European data with Chinese companies (1-day TikTok ban might have been a test to gauge reactions.). But the model is Open Source and potentially we may see more platforms and resellers of US/Europe-hosted versions, potentially leading to price drops among similar products in the AI market overall.

Sources:

https://www.businessinsider.com/chinese-ai-lab-deepseek-massively-undercuts-openai-on-pricing-2025-1?IR=T

https://www.deepseek.com/