Chip shortages forced China to find way to make cheaper AI models than US

Chinese AI startups including DeepSeek, Moonshot AI, and Z.AI now offer models competitive with OpenAI and Anthropic but at 2-33 cents per task versus $2.75 for Claude, driven by chip export restrictions that forced efficiency innovations. US chip embargoes have catalysed a cost and performance advantage for Chinese models in inference workloads.

This Wire brief sits within Fusion42's coverage of AI Frontier Models. Wire is Fusion42's founder-focused intelligence feed: each story is connected to the funds and startups it names — every one with a live profile on Raise or Scout — so founders can follow the capital and the momentum behind the headline rather than just the headline itself. Wire analysis is one of the live surfaces Arthur reasons over.