Cloud AI is Rigged Against Startups, and DeepSeek is the Warning Shot

Author(s): Krishna Chaitanya Chavati

Originally published on Towards AI.

Meet Alex, a startup entrepreneur pursuing AI-driven efficiency only to encounter rising costs, hidden fees, and unsolvable trade-offs

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Trying to start an AI company? It’s a mess. On the one hand, there’s cloud AI, which is polished and simple to use but way too expensive. It costs more to grow because of API fees, hidden costs, and being locked into one vendor. Open-source AI, on the other hand, is cheap and flexible, but when you try to use it, you find that it needs weeks of fine-tuning, expensive infrastructure, and still isn’t as good as paid models.

Those were the only options for a long time. Pay or have a hard time. But things are beginning to change. Models like DeepSeek, Qwen and smaller ones that have been simplified are making things better. Not only are they cheap, but they can also compete with well-known closed-source AI while using fewer resources.

But how does this actually play out? That’s where Alex comes in. He’s a startup founder who thinks AI will help him cut costs and scale.

Alex had a plan. A clear, data-driven, scalable plan. The kind that convinces company founders they are about to change the world.

And AI was the solution.

Why pay humans when… Read the full blog for free on Medium.

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Published via Towards AI