Maybe the Chinese are playing the long game by trying to bankrupt the US competition? Because there's no way this is financially viable.

Small team, cheap electricity, very efficient models. Many western companies operate at a loss to gain market share. Why can't the Chinese?

Inference is cheap. I bet the financials of these Chinese companies are much saner looking than any of the big US AI companies which are bloated by investors.

DeepSeek hasn't raised enough money to be actively selling tokens at a loss. They have a small team, extremely low overhead relative to other labs, operate in a place with the essentially the cheapest commercial electricity rates in the world, and their architecture lends itself very well to cheap inference.

If you think heavily subsidizing AI models isn’t financially viable, I have some bad news for you about US AI companies.

Deepseek has made some incredible advancements in model efficiency, and more importantly actually publishes those advancements so everyone can benefit from them.

Federal ban incoming then. They did it with cars already.

Maybe not. I don't see how US inference providers can compete anyway with commoditized models. Costs are out of control here and the infrastructure is way worse.

US suppliers are fine and won't go bankrupt, they can just focus on serving bigger "Pro" class models from their large datacenters. In fact cheap AI makes the bigger and smarter models more useful because it's smart enough to draft a clear question to the model, which helps minimize wasted tokens.