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Brett: Chinese models like DeepSeek and Kimmy K3 are gaining traction, but primarily in China and emerging markets, and haven't significantly challenged Western frontier models like Gemini or ChatGPT.
Ben Horowitz states that various software companies, customer support services, and specialized applications benefit from cheap intelligence offered by open-source models like DeepSeek and Kimmy, with virtually all AI application providers utilizing some open-source component.
The open-source AI landscape is thriving, with multiple strong proprietary US options like Google, OpenAI, Anthropic, XAI, and Thinking Machines. Additionally, Chinese open-source models such as Kimi, DeepSeek, and Quinn are contributing significant development, suggesting a diverse, competitive future.
DeepSeek CEO Liang Wenfang founded the AI company to benefit humanity, not for maximum profit or an IPO, embracing a vision-driven approach.
Frank points to unknown factors for Chinese model companies, including R&D borrowing and government subsidies. DeepSeek's V4 model, priced up to 10x lower on its platform than on Microsoft Azure, suggests significant structural margin differences.
Microsoft is reportedly considering a locally hosted fine-tune of DeepSeek V4 for Copilot Co-work to offer cheaper AI access to enterprise customers, potentially normalizing Chinese models in US enterprise stacks.
The launch of DeepSeek and Huawei's Cloud Matrix disproved the narrative that China was far behind and would copy U.S. regulations.
Nick observes OpenRouter's weekly usage leaderboard is dominated by Chinese models, with Tencent, Xiaomi, and Deepseek occupying the top three spots.
Chinese AI models now account for over 30% of US developer traffic on Open Router, peaking at 46%, with DeepSeek offering input tokens at roughly 55 times cheaper than OpenAI.