UBS: 60% of Companies Are Already Curbing AI Spend

UBS says roughly 60% of companies actively tracking their AI budgets are already curbing spend and shifting workloads to cheaper models, with Chinese open-source alternatives leading the migration. The pricing gap is the driver, and it is getting hard to ignore.

What UBS actually found

A UBS report finds that roughly 60% of companies actively tracking their AI budgets are now migrating workloads toward cheaper models, with Chinese open-source alternatives leading the charge. The reason is straightforward: certain Chinese AI models cost as little as $2 to $3 per million output tokens, compared to around $15 for comparable US models.

JPMorgan published a note in late June 2026 saying Chinese AI models are up to 50 times cheaper than OpenAI and Anthropic offerings, with enterprises rethinking their spending. The 50x figure only holds at the extreme ends of the pricing curve, but the direction of travel is what matters for the trade.

Enterprises are already switching

Enterprise AI cost reduction drove Coinbase to default engineers to Chinese open-weight models GLM 5.2 and Kimi K2.7 Code, cutting its AI bill nearly in half while token usage climbed. Microsoft has disclosed it is evaluating a fine-tuned DeepSeek V4 as a lower-cost engine for its Copilot Cowork enterprise platform.

Uber exhausted its entire 2026 AI coding budget by April after roughly 5,000 engineers drove token consumption beyond projections; the company has since capped individual AI tool spend at $1,500 per month. The pattern is consistent: budgets blew out, and the reaction is routing to cheaper endpoints.

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Market share is moving fast

OpenRouter data shows open-source models, particularly Chinese offerings like DeepSeek, have surged from holding one-third of usage in late 2025 to dominating up to 60% of token traffic by mid-2026. The four most popular models on OpenRouter are all Chinese, with DeepSeek holding the top spot.

Open-source models are showing that they are 90% as good at 10% of the price, said Val Bercovici, chief AI officer at WEKA, which helps companies run AI models faster and cheaper. We don’t need to spend the premium tokens on every level of effort.

The IPO overhang

OpenAI and Anthropic are both preparing for public offerings. CNBC reported in May 2026 that cheap AI could derail both IPOs, since enterprise buyers have a credible low-cost alternative for non-frontier workloads.

Tech stocks sold off for much of last week as investors reassessed AI valuations as doubts about returns on massive spending were compounded by weak post-IPO show from SpaceX and reports that OpenAI may delay its listing. The bifurcation thesis, frontier reasoning on US models and commoditized inference on Chinese ones, is now the base case.

Options market and stocks to watch

MSFT: Watch for reaction to any confirmation that Copilot Cowork routes to DeepSeek or another open-source engine. Margin implications cut both ways, lower COGS but pressure on premium AI ARPU.

NVDA: Watch for how the shift to smaller, cheaper models filters into inference demand narratives. Chinese labs are constrained on top-end GPUs, which is either a headwind for datacenter demand or a signal that efficient models still pull compute.

BABA: Alibaba’s Qwen family is a direct beneficiary of enterprise migration. Watch for pricing behavior once current promotional discounts roll off.

COIN: Coinbase is the highest-profile enterprise case study for switching to Chinese open-weight models. Watch commentary on AI opex on the next earnings call.

GOOG: Watch Gemini pricing response and any Google Cloud disclosures on enterprise routing behavior. For more, see other news.

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