China’s DeepSeek gives Europe’s tech firms a way to catch up in global AI arms race

DeepSeek represents ‘a significant step forward in democratising AI’ for Europe’s tech start-ups, according to executives

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DeepSeek’s emergence is changing the landscape for AI, as it offers companies access to advanced technology at a fraction of the cost. Photo: Shutterstock

Published: 5:06pm, 3 Feb 2025

Hemanth Mandapati, boss of German start-up Novo AI, was an early adopter of DeepSeek technology when he switched to the Chinese firm’s artificial intelligence (AI) model from ChatGPT creator OpenAI’s own model two weeks ago.

“If you have built your application using OpenAI, you can easily migrate to the other ones … it took us minutes to switch,” he said in an interview on the sidelines of the GoWest conference for venture capitalists in Gothenburg, Sweden.

DeepSeek’s emergence is changing the landscape for AI, as it offers companies access to advanced technology at a fraction of the cost, according to interviews with more than a dozen start-up executives and investors. It also has the potential to push other AI companies to improve their models and bring down prices.

“There was an offer from DeepSeek which was five times lower than their actual prices,” Mandapati said. “I am saving a lot of money and users don’t see any kind of a difference.”

Europe’s tech start-ups had struggled to adopt AI models at the same rate as US rivals, which have easier access to funding. But executives said DeepSeek could be a game changer.

“It marks a significant step forward in democratising AI and levelling the playing field with Big Tech [firms],” said Seena Rejal, chief commercial officer of British firm NetMind.AI, another early adopter of DeepSeek.