StepFun, a Shanghai based AI company, has released Step 5 Preview, its new flagship AI model. It replaces an earlier model called Step 3.7 Flash and is being tested against rivals by Artificial Analysis, a firm that runs AI models through a wide range of tests to compare how smart, fast, and expensive they are.
The headline result is about price, not raw ability. Step 5 Preview scores the same as Kimi K3, a top Chinese model, on the overall test score. But running one typical task on Step 5 Preview costs about 72 cents, compared to roughly 2 dollars for Kimi K3 to reach that same score. The gap comes almost entirely from what StepFun charges per unit of text, which sits well below what rival labs charge.
The model manages this while still being large. It has 600 billion settings in total, but only a slice of about 27 billion gets used to answer any single question. This design, common among newer AI models, is why a model this size can still run cheaply: it does not have to switch on its full size for every task.
Step 5 Preview is not the strongest model everywhere. It does well on hard reasoning and factual knowledge tests, matching or beating rivals there. But it falls behind on what the industry calls agentic tasks, meaning work where the AI has to carry out many steps on its own, such as running software commands or handling a multi-day project without a person checking in at each step. On those tests, it trails competing models by a wide margin. It also tends to guess rather than admit uncertainty, which means it gets more answers wrong than a rival like GLM-5.3 even though it attempts more questions.
StepFun itself is not a small player. It was founded in 2023 by Jiang Daxin, a former chief scientist at Microsoft's Asia research lab, and closed a funding round worth more than 700 million dollars earlier this year, one of the largest single AI investments in China over the past year.
The bigger story sits above this one model. Chinese AI labs, including StepFun, DeepSeek, Moonshot, and others, are locked in a price war that has pushed the cost of running capable AI down sharply over the past year. That price pressure is already showing up in how businesses buy AI: Chinese models have been taking a growing share of paid AI use worldwide, precisely because they do similar work for a fraction of the cost.
For business operators watching from outside the AI industry, the practical point is this: the cost of getting a computer to answer questions and reason well is dropping fast, but the cost of getting one to reliably finish a real, multi-step task on its own is not falling nearly as quickly. Any team currently comparing AI vendors should ask which of those two things they actually need, because a model's headline score does not tell you which one you are getting. StepFun also plans to release Step 5 Preview's underlying files for free in October, so businesses uneasy about routing data through a Chinese company's servers will eventually have the option to run it entirely on their own machines instead.