DeepSeek undercuts rivals with 3-cent AI model, but performance lags
Low cost doesn't always mean low quality, but in this case, it might.
DeepSeek logo on screen against a world map. Dominika Zarzycka/SOPA Images/LightRocket/Getty.
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- V4-Flash costs an average of 3 cents per benchmark test, over 100 times cheaper than Anthropic's Claude Fable 5 at $3.15.
- The model charges $0.14 per million input tokens and $0.28 per output tokens, requiring fewer steps to complete tasks than competitors.
- V4-Flash scored 50 out of 100 on intelligence tests, matching Google's Gemini 3.6 Flash but trailing OpenAI GPT-5.6 and Claude models by nine or more points.
- DeepSeek faces growing domestic competition from Moonshot, ByteDance, and Alibaba as all vie with US firms for businesses seeking cheaper AI deployment.
Key Takeaways by nexos.ai, reviewed by Cybernews staff.
A version of Chinese startup DeepSeek's flagship AI model is by far the least expensive to run on benchmark tests among well-known models globally and more than 100 times cheaper to run than Anthropic's Claude Fable 5, according to a research firm.
DeepSeek, which sources have said is preparing for a potential IPO, officially released its V4-Flash model on Friday, its latest attempt to regain momentum by doing what it is best known for - offering ultra-low-cost AI alternatives.
The startup's R1 model became a global sensation in early 2025, triggering a selloff in global technology stocks and raising questions about the large amounts US companies were spending on AI.
DeepSeek's V4-Flash charges $0.14 per million input tokens and $0.28 per million output tokens, according to research firm Artificial Analysis. A token is a unit of data used to measure AI usage.
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San Francisco-based Artificial Analysis estimated V4-Flash's average cost at 3 cents per test, compared with 86 cents for Kimi K3 from Chinese rival Moonshot AI, $1.86 for OpenAI's GPT-5.6 Sol and $3.15 for Claude Fable 5.
The comparison provides a more realistic measure of value than pricing alone because it accounts for the amount of data a model must process and generate to complete a task. A model with low headline price can still prove expensive if it requires significantly more steps to produce an answer.
DeepSeek once commanded most of the headlines about Chinese AI development but was quickly besieged by many domestic rivals including other startups such as Moonshot, MiniMax and Z.AI as well as tech giants like ByteDance and Alibaba. All are vying with US tech firms for global adoption, targeting businesses seeking cheaper ways to deploy AI at scale.
Artificial Analysis said DeepSeek's V4-Flash model scored 50 out of 100 on its Intelligence Index, which combines results from nine benchmarks spanning coding, reasoning and workplace-style assignments.
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That's the same score as Google's Gemini 3.6 Flash, and one point behind Meta's Muse Spark 1.1 and GLM-5.2 from Z.AI which is also known as Zhipu.
Moonshot's Kimi K3, however, scored a 57 while Anthropic's Claude Opus 5, Fable 5, and OpenAI GPT-5.6 scored nine or more points higher.
DeepSeek is also preparing a more powerful version of its model, called the V4-Pro. It has not given a date for that version's official release.
Separately on Monday, Alibaba unveiled its largest and most capable artificial-intelligence model to date, the Qwen3.8-Max, which is not far behind in size when compared with an offering from domestic rival Moonshot AI launched last month.