Cost
3 milestones in AI history
DeepSeek R1: Open-Source Reasoning
Chinese AI lab DeepSeek released R1, an openly released reasoning model that approached OpenAI's o1-class performance at a fraction of the cost. Trained with reportedly modest compute budgets, it challenged the assumption that frontier reasoning required the largest Western-scale investment programs.
GPT-5.6 and ChatGPT Work
OpenAI released GPT-5.6 in three tiers — Sol at the top, mid-range Terra, and the fast, cheap Luna — alongside ChatGPT Work, an agent built to carry out whole jobs rather than just answer questions: operating across applications and files, running long tasks, and producing documents, spreadsheets, and websites. Three weeks later OpenAI cut Luna's price by 80% and Terra's by 20% as competitive pressure mounted.
Three Chinese Labs Ship Major Models in 24 Hours
Within a single day, DeepSeek shipped V4-Flash-0731 — comparable to frontier Western models on coding at roughly a 99% discount — MiniMax released H3, an omni-modal model generating 15-second 2K video clips, and ByteDance launched Seedance 2.5, extending single-run video generation to 30 seconds. The releases landed amid a brutal late-July selloff in which the world's 20 most valuable chip companies lost about $1.3 trillion in market value on fears that China's semiconductor progress and cheap models would reset AI economics.