New Delhi: Cost-conscious US companies are increasingly replacing American AI models with cheaper Chinese alternatives. Although firms such as Anthropic, OpenAI, and Google remain at the forefront of AI development, Chinese AI companies are attracting businesses with powerful, low-cost models.
Last month, Beijing-based startup Z.ai launched its latest model, GLM-5.2. It is emerging as a strong competitor to offerings from OpenAI and Anthropic, combining powerful performance with substantially lower costs.
According to a report in Financial Times, major companies, including DoorDash, Airbnb, and Siemens, are adopting Chinese AI tools.
Companies are drawn to these Chinese models not just because of their lower costs, but also because of their ‘open-weight’ approach, which allows companies to customise them for their specific business needs.
In June, AI startup Lindy shifted 100 per cent of its traffic from Anthropic’s Claude models to DeepSeek. The Chinese AI company first gained global attention in early 2025 and launched an upgraded AI model in April this year. Since then, DeepSeek has emerged as a major competitor to OpenAI’s ChatGPT and Google’s Gemini, offering comparable capabilities at a significantly lower cost.
“We did it, and you could see that cost curve go down, like, crash to the ground,” Lindy CEO Flo Crivello told CNBC.
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Why Chinese AI models
Data from OpenRouter, a platform that provides unified access to leading AI models while tracking their usage, shows that Chinese AI models — from DeepSeek and Z.ai — have surpassed US models such as Anthropic’s Claude and OpenAI’s ChatGPT in usage on the platform.
As AI becomes an integral part of business operations — even as companies continue to reduce headcount — and firms such as Meta encourage employees to use AI extensively, the demand for lower-cost AI models has become increasingly important.
“Enterprises have an incentive to shift some of their workload to cheaper models. Why would you pay a premium for Anthropic or OpenAI models when, for many workloads, the Chinese models are generally good enough?” Sam Bresnick, a research fellow at Georgetown University’s Center for Security and Emerging Technology, told Financial Times.
In 2025, US President Donald Trump also described the rapid rise of DeepSeek as “a wake-up call” for America’s technology industry, saying its growing popularity should push US companies to strengthen their competitiveness.
“The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing,” the President had said.
Besides being cheaper, Chinese AI models also offer versatility, with their open-weight architecture — where the model’s parameters are publicly available — giving organisations far greater flexibility.
Open-weight models enable companies to customize them for their specific use cases while also providing greater transparency into how the systems process data. From a cybersecurity perspective, this additional visibility and control can be especially valuable when handling sensitive corporate information.
(Edited by Aamaan Alam Khan)