The global artificial intelligence race is witnessing another “DeepSeek moment”, with Chinese AI models rapidly closing the performance gap with their US counterparts while offering significantly lower operating costs. According to a recent Jefferies report, this shift could reshape the competitive landscape of enterprise AI and accelerate global AI adoption.
The report highlights the launch of GLM 5.2 by Hong Kong listed Z.ai, formerly known as Zhipu AI, on June 13. Jefferies said industry sources believe the model is “almost equal to Anthropic as a competitor for the corporate market” while costing only one fourth as much in terms of cost per token. The brokerage described the development as another watershed moment for the AI industry, drawing parallels with the disruption created by DeepSeek earlier this year.
The report notes that lower priced Chinese models are already gaining traction globally. Data from AI model aggregator OpenRouter shows that leading Chinese AI models processed 21.37 trillion tokens during the week ended June 21, compared with 5.76 trillion tokens for the top US models. This sharp increase from 4.37 trillion tokens in late April suggests enterprises are increasingly experimenting with lower cost alternatives.
Jefferies believes the growing popularity of Chinese models reinforces the view that large language models are becoming commoditised, particularly in the consumer market. As AI models become cheaper, businesses are expected to focus more on data privacy and deployment flexibility rather than simply choosing the most powerful model.
The brokerage also argues that falling AI costs may ultimately benefit the broader AI infrastructure ecosystem. Citing the economic principle known as the Jevons Paradox, Jefferies said cheaper AI tokens are likely to stimulate greater usage, resulting in higher demand for computing power, memory chips and AI infrastructure rather than reducing investment.
The findings suggest that the next phase of the AI race may be driven less by who has the smartest model and more by who can deliver powerful AI at the lowest cost.
