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DeepSeek’s low-cost V4 models are putting fresh price pressure on China’s AI market.
Chinese AI companies are responding with steep API discounts and new billing experiments, according to the South China Morning Post, as rivals try to keep developers from shifting to cheaper models. For enterprise tech leaders, cheaper AI APIs could reduce inference costs but may also increase vendor and cloud pricing risks.
DeepSeek triggers fresh API price cuts
Xiaomi is among the latest Chinese technology companies to respond to DeepSeek’s pricing pressure. The smartphone and electric vehicle maker cut API costs for its MiMo-V2.5 model by up to 99% compared with previous levels, according to the South China Morning Post (SCMP).
The cuts appear to have boosted developer demand. SCMP noted that the usage of Xiaomi’s MiMo-V2.5 and MiMo-V2.5-Pro models surged after the pricing announcement. MiMo-V2.5 climbed to sixth place on OpenRouter after processing 1.7 trillion tokens in the seven days to Monday, up more than 999% from the previous week.
Lower prices can change the economics of AI products that rely on frequent model calls, long context windows, or agent-based workflows.
AI firms test new revenue models
Other Chinese AI firms are taking different approaches as pricing pressure grows.
SCMP added that MiniMax launched its next-generation flagship model, MiniMax M3, with token-based billing and subscription plans ranging from $7.24 to $69.28 per month.
The launch shows that some Chinese AI vendors are pairing lower token prices with subscriptions to protect recurring revenue.
Cloud providers face margin pressure
The pricing war could also ripple into China’s cloud sector. AI Weekly said the shift creates both risks and opportunities — cloud providers may face margin pressure, while developers and startups could benefit from lower inference costs.
AI Weekly also highlighted that Xiaomi’s 99% price cut may be difficult to sustain if usage growth does not turn into durable paying customers. That risk is relevant to enterprises evaluating cheaper AI services, since low prices can change if providers later adjust their terms, raise rates, or shift customers toward subscriptions.
DeepSeek’s V4 pricing has not just pressured rival model makers. It has pushed China’s AI ecosystem to rethink how model access should be packaged, priced, and sold.
DeepSeek’s pricing pressure is only one front in a larger AI race. Anthropic has warned that US-China competition could reach a decisive point by 2028.