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SAN FRANCISCO — Flo Crivello’s San Francisco-based startup, Lindy.ai, creates artificial intelligence “assistants” to manage your email and calendar. At first, the company leaned heavily on Anthropic’s top-of-the-line AI models.

But in meeting after meeting with his finance guy, Crivello said, one thing became clear: “By far, our No. 1 expense was Anthropic,” he said. “Like, more than payroll.”

More than payroll — for over two dozen employees. More than rent. More than for anything else. So last month, Crivello announced that Lindy had migrated 100% of its traffic to the Chinese AI model DeepSeek-V4.

“It was just 10x cheaper,” he said, adding that it had saved the company millions of dollars. “So it was a very, very simple business decision.”

Artificial intelligence has become one of the — it not the — fastest-growing costs for U.S. businesses. But for many companies, it’s a double-edged sword: necessary but expensive. To survive, a growing number of firms are switching from American models to cheaper Chinese AI.

In the race to create the best AI models, U.S. companies like Anthropic, OpenAI and Google lead the world. Experts say Chinese models are six to 12 months behind in terms of capabilities.

But China has carved out a niche in open-source models, which are free to download and adapt. “The open-source scene right now is absolutely dominated by the Chinese. It’s not even close,” Crivello said.

He said every founder he knows who is working in the AI space either is thinking about switching to Chinese models or has done so already.

And ballooning AI costs are not just a startup issue either. Uber CEO Dara Khosrowshahi spoke about it last month on the Invest Like the Best podcast. “We blew through our AI budget in a quarter, you know, for the whole year, essentially. And it is forcing us to adjust,” he said.