Hot take: The reason this is happening is because the market for Chinese AI models hosted by Chinese companies is struggling. Even the market for Chinese AI models hosted by western companies is soft: During the week of May 18, OpenRouter processed 3.4T DeepSeek v3 Flash tokens (their most popular model). Google has announced that Gemini is processing 746T per week; Claude is probably processing more. And the Chinese models were already staggeringly cheap, far cheaper than most Gemini, Claude, or GPT models, before this recent array of pricing changes.
Broadly: No one is using the Chinese AI models. Everyone, globally, everywhere, including in China, is using the models from OpenAI, Anthropic, and Google. The models from the Big Three western labs represent >80% of all tokens processed and likely >95% of all revenue.
Broadly: No one is using the Chinese AI models. Everyone, globally, everywhere, including in China, is using the models from OpenAI, Anthropic, and Google. The models from the Big Three western labs represent >80% of all tokens processed and likely >95% of all revenue.