DeepSeek Pitches Deep Discounts Amid Fierce AI Competition

DeepSeek has begun offering developers discounts amid increasing competition in China’s artificial intelligence (AI) space.

The startup said in a post on social media platform X Monday (April 27) that it was offering a 75% discount to developers using its DeepSeek-V4-Pro model until May 5.

The offer was flagged in a report by Bloomberg News, which said it is fueling competition in the Chinese AI industry and threatens to restart a price war that began when the company unveiled its R1 model last year.

That model caused an uproar in the AI industry, with DeepSeek saying it had trained it at a fraction of the cost paid by its much larger rivals.

DeepSeek proved that “small companies, individual developers, and even researchers are now able to harness the power of AI without breaking the bank,” Roy Benesh, CTO at eSIMple, told PYMNTS at the time.

“This can lead to the development of new ideas and technologies due to the increased competitiveness in the field. This can alter the current state of affairs by providing new options for customers where older established AI companies are likely to charge less and improve their technology faster.”

Bloomberg added that the latest releases from OpenAI, Anthropic and Google can be costly to access, leading Chinese AI companies to discount in a bid to entice new customers.

“The pricing, open source availability and 1 million context window features all lower barriers for developers, startups and small enterprises,” Akshar Keremane, co-founder of Bangalore-based AI startup O-Health, told Bloomberg. “It allows users to experiment at a model capability and scale that wasn’t available earlier.”

The news follows a report from last week that DeepSeek was in talks with Chinese tech giants Tencent and Alibaba about investing in its inaugural funding round. The Information, citing four sources familiar with the matter, said DeepSeek hopes to raise funding at a valuation of more than $20 billion, after garnering strong interest from investors.

In other AI news, PYMNTS wrote recently about the use of the technology by banks and retailers at their call centers. AI can lead to faster resolution times and less friction, that report said, while keeping customers in a controlled environment where business can direct outcomes.

“In practical terms, the benefit is twofold,” PYMNTS wrote. “Customers receive quicker, more relevant service. Institutions retain the interaction rather than pushing it to external channels or abandoning it entirely. That retention has implications for loyalty. A customer who resolves an issue quickly is more likely to remain engaged and return for future transactions.”

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.