I obviously don't know the full economics of the Chinese-hosted models, but estimates[1] put the cost of hardware (servers + networking) at 70-80% of the total cost. Those things aren't meaningfully cheaper in China, so serving DeepSeek at 1/3 the cost of the cheapest US provider doesn't really compute unless it's heavily subsidized or we believe that Chinese engineers are just that much better at optimization.
Edge models, yes, they can be convenient to run batch jobs locally. I still would argue there's no economic benefit over paying for models. Haiku has a bad price/perf but others in that class are significantly cheaper in hosted APIs.
Doesn't matter what I think, the reality is that the majority of enterprises (where the real $ comes from) will not consider sending their data to China.
1. https://epoch.ai/data-insights/ai-datacenter-cost-breakdown
Hardware is arbitrarily priced, with the floor being as little money as it costs to make it, and the ceiling being how much competitors are willing to pay for it - the latter is much more of the driver of current pricing in the West than in China.
In a free market, the country would not matter, but Chinese models are often running on domestic hardware which does not directly compete with Nvidia GPUs and thus they can't get away charging as much for it.