Western labs face a pricing stress test as Coinbase dumps them for Chinese models
coinbase cut its ai spending in half by switching from western labs to chinese models like glm and kimi. the move signals a wider shift where aggressive pricing from chinese labs threatens the margins of us giants like openai and anthropic.
coinbase ceo brian armstrong announced the company slashed its ai spending by 50% despite record token usage by switching to cheaper chinese models like glm 5.2 and kimi 2.7. the firm implemented a smart routing system that selects models based on task suitability and price, boosting cache hit rates from 5% to 60%. this strategy mirrors moves by other startups like lindy and snowflake, creating a pricing dilemma for western labs that must reduce rates to prevent churn. the shift challenges the narrative that western dominance is guaranteed and forces us labs to prove their premium margins can survive a global price war.