The collapse in performance between best and second best, low switching cost, and the plummeting cost of training new AI models are driving the market towards cheaper alternatives.
Performance: “Using the Epoch Index as a gauge, the leading AI product is now just 6% more capable than the one at the 90th percentile, an ‘almost invisible’ difference…”
Cost: “GPT-5.5 and Claude Opus each charge $5 for a million tokens, compared with just $0.019 for DeepSeek.”
Outcome: “The Information reported on June 23, a service that compares AI models so developers know which ones should power their apps or handle different tasks within them, show that the share of all tokens processed on open-source models—primarily DeepSeek and MiniMax from China—climbed to roughly 65% in the second week of June, up from 34% during the same week in January and 26% the year prior.”
Per the article, Lindy AI switched from Claude to Deepseek, Coinbase Global, Inc. has announced a goal to move 80% of its workloads to low-priced alternatives by end of year, and even MSFT is considering adding DeepSeek to its product lineup.