DeepSeek warns of major AI price hike

Chinese AI company DeepSeek is preparing a significant increase in the prices of its AI services, Bloomberg reports.

In a notice published on Thursday, the company did not disclose the new pricing but described the increase as substantial and advised customers to adjust their spending plans in advance.

DeepSeek currently charges $0.14 per million input tokens and $0.28 per million output tokens for its V4 Flash model. By comparison, Moonshot charges $3 and $15 for its Kimi K3 model, while Anthropic's Fable 5 costs $10 and $50 per million tokens, respectively.

According to Bloomberg, DeepSeek's ultra-low pricing has created what some in the industry describe as a "dead zone," making more expensive and less capable competing models difficult to justify. The company's decision to raise prices could also ease pressure on OpenAI and Anthropic, whose long-term business models have been challenged by the availability of much cheaper AI services.

DeepSeek is currently raising fresh funding and is reportedly preparing for a potential IPO later this year. Founder Liang Wenfeng is expected to balance investor expectations with the rapid expansion of the AI market and the heavy infrastructure investments required to support it, including a 1 GW data center under construction in Inner Mongolia.

The price increase will apply to developers and businesses using DeepSeek's API. Since the V4 Flash model weights remain open source, customers can still deploy the model on their own infrastructure or switch to other providers.