Z.ai, formerly known as Zhipu and which has raised $1.5B from Tencent and others, releases GLM-4.5, an open source AI model that's cheaper to use than DeepSeek
BEIJING — Chinese companies are making smarter artificial intelligence models that are increasingly cheaper to use …
Context & Ripple Effects
Z.ai’s $1.5B backing from Tencent and other investors gives its open-source release more strategic weight than a standalone model launch: it pairs a funded Chinese AI developer with a direct cost challenge to DeepSeek.
The release begins a broader product arc that later expanded into open-weight vision models with native function calling and larger GLM generations. That makes GLM-4.5 an early signal of Z.ai using open availability and operating cost as routes to adoption.
First-order effects
- Developers can evaluate and deploy an open-source GLM-4.5 alternative positioned as cheaper to use than DeepSeek, increasing their model-choice leverage immediately.
- Z.ai gains a clearer acquisition pitch: its investor-backed model family can compete on both openness and inference cost.
Second-order effects
- DeepSeek and other model providers face greater pressure to demonstrate either lower cost per useful task or differentiated performance as buyers compare substitutable Chinese models.
- Cheaper open models can shift value toward deployment, integration, and application-layer distribution, where access to model weights alone is not the full product.
Third-order effects
- If repeated releases sustain comparable capability at lower operating cost, foundation models may become less differentiated as standalone products and more differentiated by distribution, tooling, and infrastructure efficiency.
- Later GLM-5.1 price increases amid agentic-AI demand indicate that the low-cost trajectory is not one-way: higher-value workloads may still support price segmentation even as baseline models commoditize.
The trend: This is one data point in the race to lower AI cost per useful task through open-weight releases while reserving pricing power for more capable, agent-oriented models.