Taiwanese IT service providers are weighing the dual impact of DeepSeek's entrance into the AI market. The company's approach to democratizing AI computing power marks a shift from premium-tier services to more accessible solutions, potentially accelerating AI adoption. However, the emergence of open-source opportunities through DeepSeek will test companies' technical expertise and human capital.
DeepSeek's aggressive pricing strategy has sent ripples through the industry. The DeepSeek R1 model charges US$2.19 per million tokens for output and US$0.14 to US$0.55 per million tokens for input, significantly undercutting OpenAI's GPT-3 Mini, which charges US$4.4 per million tokens for output and US$1.1 per million tokens for input.
In the consumer electronics sector, industry leaders see DeepSeek's pricing as catalytic for edge AI development. Acer's Corporate President, Victor Chien, emphasized that DeepSeek's emergence creates new opportunities for Acer, enabling the training and deployment of smaller models in end applications while maintaining architectural flexibility.
According to Acer's Director of Global Marketing and Corporate Communications, Ray Tang Lin, the AI ecosystem will become increasingly diverse as more companies enter the market. The previously high costs of AI computing power had created barriers to entry, but the lower threshold is expected to invigorate industry development. Additionally, DeepSeek has heightened awareness of AI cybersecurity concerns, potentially creating new business opportunities.
WiAdvance's President, Michael Xia, highlighted that DeepSeek has demonstrated how software development can democratize AI services. Despite building upon existing foundations, DeepSeek's achievement holds particular significance, reinforcing confidence that AI development remains in its early stages with promising future applications.
While DeepSeek's entry provides positive momentum for AI development, it also intensifies the competition between open-source and proprietary AI solutions, presenting significant challenges for Taiwanese IT service providers.
Industry analysts note that most Taiwanese IT service providers operate as distributors of foreign products, constrained by Taiwan's market size. Attempts at independent product development and sales have achieved limited success, leading companies to focus on distribution and value-added services. However, the rise of open-source development, exemplified by DeepSeek, poses new challenges for providers traditionally dependent on foreign manufacturers, particularly in terms of technical expertise and human resource allocation.
The industry further emphasizes that while open-source architecture enables more innovative applications, it also introduces greater uncertainty. Taiwanese IT service providers struggle to allocate resources effectively, with most either continuing to follow foreign manufacturers' lead or dedicating minimal resources to open-source AI research. The recent announcements by AWS and Microsoft to integrate the DeepSeek R1 model into their AI service platforms offer some reassurance.
For IT service providers, DeepSeek's market entry has had one positive effect: pressuring foreign manufacturers to respond more quickly to market demands. Clients' longstanding concerns about high implementation costs and deployment challenges are now being addressed more urgently as foreign manufacturers face increased competition.
