DeepSeek announces 75% 'Off peak' hours sale, and why it is 'bad news' for its rivals in the US and Europe

Chinese AI startup DeepSeek has announced an off-peak discount program, offering up to 75% off on its advanced AI models, DeepSeek-V3 and DeepSeek-R1. This move is set to disrupt the AI market, posing a significant challenge to rivals in the US and Europe.
Starting today, DeepSeek's API platform will provide substantial savings during specific hours. From 16:30 to 00:30 UTC daily, DeepSeek-V3 will be available at a 50% discount, while DeepSeek-R1 will see an impressive 75% price reduction. This initiative aims to encourage users to optimise resource usage and leverage cost-effective AI services during less busy periods.
The discounted pricing applies to both input and output tokens, with detailed rates shared on DeepSeek's website. For DeepSeek-V3, standard prices per 1 million tokens include $0.07 for cache hits, $0.27 for cache misses, and $1.10 for output, all slashed in half during off-peak hours. For DeepSeek-R1, standard rates of $0.14 for cache hits, $0.55 for cache misses, and $2.19 for output drop to just $0.035, $0.135, and $0.550, respectively.
DeepSeek's aggressive pricing strategy is expected to put pressure on competitors like OpenAI and Google's Gemini, which have already introduced discounted tiers of access in response to DeepSeek's low-cost AI models. The move has also triggered a major sell-off in global equity markets, as investors worry about the potential threat to current AI market leaders.
The off-peak discount program has garnered attention on social media, with users praising the "banger" pricing and calling it a "smart move" for developers and businesses leveraging AI tools. Some have humorously noted setting alarms to take advantage of the 4:30 PM UTC start time to maximise savings.
DeepSeek's innovative approach and competitive pricing have positioned it as a formidable player in the AI market. As the company continues to expand its offerings and improve service quality, rivals in the US and Europe will need to adapt to stay competitive.