UBS Finds 60% of Companies Shift AI Budgets to Cheaper and Chinese Open Source Models

UBS reported that 60% of companies actively monitoring artificial intelligence budgets are shifting spending to cheaper models and open-source Chinese alternatives, driven by escalating cloud costs. The bank noted that enterprise bills have reached extreme levels, with some users spending up to $35,000 per month and teams exceeding usage quotas by 200%, prompting many to cut internal AI tooling stacks from five models down to two.

Rather than abandoning AI initiatives, organizations are implementing model routing to direct simpler tasks to lower-cost systems, reserving premium models for complex reasoning and code generation. Chinese open-source models such as Qwen, DeepSeek, MiniMax, GLM, and Kimi are fitting into enterprise cost curves as they become available for local deployment or cloud catalog access.