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Comment by White_Wolf | Hacker News Reader

I really doubt Deepseek is subsidised. It's roughly the same price everywhere you look. Deepseek is using the Huawei hardware (as far as I managed to understand from various articles) and hence the savings.

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And Chinese electricity prices are some of the lowest

Don't know why people keep parroting this, this is incorrect. Chinese electricity prices are equal or slightly cheaper then most of North America. But significant pockets such as those around the Quebec or other hydro plants are significantly cheaper then Chinese power pricing.

Not only that, China may subsidize AI, but so does the US.

Okay interesting. I presume that China also has low cost areas too no? Their grid at least seems more stable. Datacenter construction is more likely to raise prices in the US than there.

China's grid has had some serious issues over the past decade that didn't get widely reported for all the reasons you can think of. Some of them were exasperated by poor planning and censorship making it hard to hold anybody accountable. Not to say that they don't/didn't eventually work on it, but there was a widely held belief that the people at the top weren't even aware of the issue until foreign firms were directly impacted. This is not to say they can't or won't expand come hell or high water, though.

https://www.bbc.com/news/business-58733193 https://www.cbc.ca/news/business/china-power-cuts-1.6193281

Western china has abundant clean energy but only limited grid connections to send it east. The problem is that they simply don't have much water. The US is similar (places with abundant green energy lack water, even dam-heavy Washington state has this issue in the east part of the state).

China averages 7¢/kWh, almost 1/3 of the US average at 19¢/kWh.

My rates (before PG&E were forced to concede) were as high as 49¢/kWh, a 7x factor.

These are residential rates and not industrial ones, but I hope my point is clear.

China has very cheap power compared to the US, there's a reason why they had to ban bitcoin to get rid of miners.

Quebec has lower rates then 7¢/kWh at data center / wholesale level. Quebec spot market runs negative sometimes, apparently. And Oklahoma has cheap power, and probably other places. Not sure your utility bill is the place to get accurate numbers.

    "Mean wholesale electricity prices in 2024 were lowest in SPP ($27.87/MWh), the Southeast ($29.72/MWh), and Southern California ($29.95/MWh), and highest in the Northwest ($59.98/MWh)."

https://www.ferc.gov/sites/default/files/2025-03/25_State-of...

If my math is right, divide those by 10 for cents per kWh

I didn't suggest it was. I pointed out that some of the subscriptions offered by the Chinese labs probably are. Not the per token API prices.

Yeah, this argument is bullshit. You can head over to Openrouter and look at the token cost for deepseek-v4-flash and deepseek-v4-pro. They are very competitive on the open market

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