DeepSeek previews new AI model adapted to run on Huawei chips

The smartphone apps DeepSeek page is seen on a smartphone screen in Beijing, Jan. 28, 2025. (AP Photo/Andy Wong, File)

BEIJING -- DeepSeek, the Chinese startup whose low-cost AI model stunned the world last year, on Friday launched a preview of a highly awaited new model adapted for Huawei chip technology, underlining China’s growing self-sufficiency in the sector.

The Pro version of the new model outperforms other open-source models in world-knowledge benchmarks, trailing only Google’s GOOGL.O closed-source Gemini-Pro-3.1, DeepSeek said.

The close collaboration with Huawei HWT.UL on the new model, the V4, contrasts with DeepSeek’s past reliance on Nvidia’s NVDA.O chips.

“This is a big deal for China’s AI industry,” said He Hui, director of semiconductor research at consultancy Omdia.

“Huawei’s Ascend chips are the country’s best homegrown alternative to Nvidia, and supporting DeepSeek V4 shows that top Chinese AI models can now run on Chinese hardware.”

Most leading AI models are trained and run on chips made by Nvidia. Huawei said its chips were used in some of the V4’s training process.

DeepSeek’s pivot underscores concerns raised by Nvidia CEO Jensen Huang and others that the U.S. firm risks losing its developer ecosystem in China due to U.S. export controls and Beijing’s self-sufficiency push.

“The day that DeepSeek comes out on Huawei first, that is a horrible outcome for our nation,” Huang said in a Dwarkesh Podcast interview this month.

Huawei and DeepSeek’s close collaboration

DeepSeek has often been hit with accusations by Washington and U.S. rivals that its success owes much to the improper use of U.S. know-how, and Friday’s launch comes one day after the White House accused China of stealing U.S. AI labs’ intellectual property on an industrial scale.

It was not clear, however, if the issue is large enough to strain relations ahead of a visit by U.S. President Donald Trump to Beijing next month to meet with China’s leader, Xi Jinping.

For its part, DeepSeek has acknowledged the use of Nvidia chips but has not commented on whether those particular chips were subject to export bans. It has also said it has not intentionally used synthetic data generated by OpenAI.

Washington began to restrict China’s access to advanced AI chips made by U.S. firms in 2022 and since then Beijing has accelerated its push to achieve tech self-sufficiency.

Huawei said it had worked closely with DeepSeek so the new V4 models could run across its full line of high-performance Ascend systems.

Nvidia now faces even more of an uphill battle in regaining market share in China.

The Trump administration in January gave the green light for Nvidia’s powerful H200 chips to be sold in China but sources have said that shipments have been stymied ​by disagreements over the terms of the sales both in China and ⁠the U.S.

Nvidia’s shares were flat in pre-market trading. Chinese chipmakers rallied on expectations for wider use of homegrown chips, with Huahong Semiconductor 1347.HK and SMIC 0981.HK surging 15% and 10% respectively.

DeepSeek now faces many rivals

Many Western and some Asian governments have banned their institutions and officials from using DeepSeek, citing data privacy concerns. Nevertheless, DeepSeek’s models have consistently been among the most used on international platforms that host open-source models.

In China, despite rocketing to national champion status a year ago, its lead has evaporated amid a slew of competitive offerings from domestic rivals.

DeepSeek said on Friday that the V4 would be particularly suited to AI agent work, which can execute more complex tasks than chatbots but needs more computing power.

Just how successful it will be remains to be seen.

“The rapid iteration of new AI models makes it difficult to determine an ultimate winner. We believe the market is not a ‘winner-takes-all’ scenario; instead, success will depend on monetization, adoption rates, and sustainable revenue from services,” Citi analysts said in a note.

That said, the release of the V4 sent shares of rivals tumbling, with Zhipu AI 2513.HK and MiniMax 0100.HK both losing 9%.

The V4 also comes in a lower-cost Flash version. Preview versions allow the company to incorporate real-world feedback and make changes ahead of a final product launch. DeepSeek did not provide a timeline for when the model is expected to be finalized.

Owned by China’s High-Flyer Capital Management, DeepSeek is aiming to raise funds at a valuation exceeding $20 billion, ​according to a report by The Information this month, which also said that tech giants Alibaba 9988.HK and Tencent 0700.HK were in discussions to take stakes.

(Reporting by Eduardo Baptista, Ethan Wang and Che Pan; Additional reporting by Liam Mo and Samuel Indyk; Editing by Miyoung Kim and Edwina Gibbs)