Chip shortages forced China to find way to make cheaper AI models than US

Chinese artificial intelligence start-ups are increasingly producing models that can compete with Western ones. They are also significantly cheaper to run.

China became a hub of industrial manufacturing because it was able to produce essentially the same goods as Western countries, but much more cheaply. Something similar is now happening in artificial intelligence.

Chinese models from DeepSeek, Z.AI and Moonshot AI are comparable in performance to US systems from OpenAI and Anthropic. However, the average cost of carrying out a standardised task using Kimi 2.6 or DeepSeek V4 Flash ranges from two to 33 cents. The same task costs $2.75 [€2.42] using Anthropic’s Claude Fable 5, according to the Chart of the Day, based on data from the Artificial Analysis benchmarking website, which Bloomberg published.

Chinese models undercut many Western flagship models on priceCost in US dollars per standardised task

In red, Chinese artificial intelligence start-ups ; in blue, Western models. Source: Denník E / Tomáš Hrivňák. Data: Bloomberg, Artificial Analysis. Done with Flourish.