Coinbase Ditches Expensive AI, Shifts to Cheaper Chinese Models

Coinbase, a major US-based cryptocurrency exchange, has shifted its AI usage to cheaper Chinese models, resulting in a significant reduction of its AI bill by half. According to Coinbase CEO Brian Armstrong, the company now uses more AI than ever before but pays substantially less for it.

The change was facilitated by the implementation of smart routing and caching systems, which allowed the company to optimize its AI usage and reduce costs. Specifically, the introduction of GLM 5.2 and Kimi 2.7 Chinese models, in addition to improved caching, enabled Coinbase to cut its spending on AI in half.

This move is not unique to Coinbase, as other companies such as Lindy and Snowflake are also exploring cheaper alternatives to Western AI labs like OpenAI and Anthropic. The shift towards more affordable AI options poses a significant challenge for these Western labs, particularly those preparing for initial public offerings (IPOs), as they struggle to maintain high growth numbers in the face of increasing competition.