This Chinese company included in US restricted entity list announces ChatGPT's newest rival that claims to be cheaper than DeepSeek
Z.ai
has announced its newest
artificial intelligence
model, GLM-4.5. The company claims that its latest AI model will be cheaper to use than
DeepSeek
. This new model shows how Chinese companies are creating more capable AI models at reduced costs. Z.ai, previously known as Zhipu, has confirmed that
GLM-4.5
is built on "agentic" AI principles. This means the model can automatically decompose a task into sub-tasks to complete it with greater accuracy, which is a different approach from the logic of some existing AI models. In June, OpenAI included Zhipu in a warning list regarding advancements in Chinese AI. The US government has also placed the startup on its restricted entity list, limiting American firms from engaging in business with it. The new GLM-4.5 model is also open-sourced, which will allow developers to download and use it for free.
What Z.ai said about its AI model GLM-4.5 being cheaper than DeepSeek
In a statement to CNBC,
Zhang Peng
, the CEO of Z.ai, said the company's new GLM-4.5 model runs on eight
Nvidia H20 chips
. These are Nvidia's AI training chips that are specifically designed for the Chinese market to comply with US export rules. While Nvidia recently received approval to resume shipments to China after a pause, the timeline for delivery remains unclear.
Zhang noted that Z.ai has adequate computing resources and does not need to purchase additional chips for now, but declined to disclose how much was spent on training the model, saying more information would be shared later.
Z.ai said it will price GLM-4.5 at 11 cents per million input tokens and 28 cents per million output tokens, compared to DeepSeek R1's rates of 14 cents and $2.19, respectively. These tokens are used to measure the volume of data processed by AI models.
In recent weeks, several Chinese firms have introduced new
open-source AI models
. At the World AI Conference in Shanghai, Tencent unveiled its HunyuanWorld-1.0 model, designed to help generate 3D scenes for game development. Alibaba followed with the launch of its Qwen3-Coder model, focused on coding tasks.
Earlier this month, Moonshot, which Alibaba backs, announced Kimi K2, which it said performs better than OpenAI's ChatGPT and Anthropic's Claude in specific coding tasks. According to the company's website, Kimi K2 charges 15 cents per million input tokens and $2.50 per million output tokens.
Back in January, DeepSeek drew attention from global investors with its AI model, which it said was developed despite US chip restrictions and came with lower training and operating costs than its US counterparts. The company claimed its V3 model was trained for under $6 million, though some analysts noted that figure reflects part of its total hardware investment, which exceeded $500 million.
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