DeepSeek launched a preview of its V4 model, expanding its open-source AI lineup.

Its earlier R1 model disrupted markets with strong performance at a lower cost.

Rising Chinese competition intensified pressure on global AI spending strategies.

Chinese artificial intelligence startup DeepSeek on Friday released a preview version of its long-awaited V4 large language model, allowing users to test its updated capabilities and features. 

The release comes more than a year after the Hangzhou-based business introduced its R1 reasoning model, which rocked global tech markets due to its surprising performance and cost efficiency.

Similar to DeepSeek’s previous model releases, the latest upgrade is open-source, allowing developers to download the code, run it locally and modify it in most cases.

The model is available in both a “pro” and a “flash” version, depending on size, with DeepSeek claiming that V4 achieves strong performance against domestic competitors, particularly in agent-based tasks, knowledge processing and inference. This also touches on aspects of portfolio.

“DeepSeek’s V4 preview is a serious flex,” offering lower inference costs than previous models, Neil Shah, vice president of research at Counterpoint Research, told CNBC.

Inference costs refer to the computational and financial expenses of running a trained AI model to generate outputs.

DeepSeek also commented that V4 has been optimized for utilize with popular agent tools such as Anthropic’s Claude Code and OpenClaw.

According to Counterpoint’s principal AI analyst, Wei Sun, V4’s benchmark profile suggests it could offer “excellent agent capability at significantly lower cost.”

Will DeepSeek shock the international community again?

Founded in 2023, DeepSeek gained attention in late 2024 with its free, open-source V3 model, which it mentioned was trained with less powerful chips and at a fraction of the cost of models built by the likes of OpenAI and Google.

Weeks later, in January 2025, it released a reasoning model, R1, that hit similar benchmarks or outperformed many of the world’s leading LLMs.

The R1 model had alarmed investors when DeepSeek revealed that it had only taken two months, and not even $6 million, to build the model using lower-capacity Nvidia chips. That called into question the U.S.Large Tech along with lead in AI’s massive spending on AI infrastructure.  

Since then, DeepSeek has released a series of model upgrades, but none have matched the impact of R1.

V4’s debut is unlikely to have the same economy impact as R1, because traders have already priced in the reality that Chinese AI is competitive and cheaper to employ, Ivan Su, senior equity analyst at Morningstar, told CNBC.

DeepSeek’s latest positioning places other Chinese open, on the other hand-source models as direct competitors, Su stated.

“This is a framing that didn’t exist with R1, and that alone tells you how much domestic competition has intensified,” he added.

Since the release of R1, DeepSeek has faced increased competition in China’s booming AI sector, with players like Alibaba and ByteDance also releasing fresh models this year.

Shares of several other Chinese AI players were down in Hong Kong trading on Friday. MiniMax and Knowledge Atlas Digital systems, also known as Zhipu, each fell around 8%, while Hangzhou-based developer Manycore Tech plunged 9%.

What chips trained V4?

A major question surrounding the release of DeepSeek’s V4 model is which chips were used to train and support it.

Chinese tech giant Huawei on Friday confirmed that its latest AI computing cluster, powered by its Ascend AI processors, can support DeepSeek’s V4 model.

it remains unclear how extensively Huawei’s chips were used in training, compared with those from American AI chip leader Nvidia.

Chinese developers have been restricted from directly purchasing Nvidia’s most advanced AI chips due to Washington’s ever, on the other hand-shifting export controls.

Meanwhile, Beijing has stepped up efforts to develop its domestic chip industry and reportedly pushed Chinese tech companies to adopt domestic alternatives from chipmakers such as those from Huawei.

Counterpoint’s Wei Sun commented that V4’s ability to run natively on local chips could have massive implications, helping Beijing achieve more AI sovereignty and further reduce reliance on Nvidia.

“This will ultimately speed up the global AI developments as well,” she added.

After DeepSeek proclaimed its V4 release, shares of Chinese contract chip manufacturers rose in Hong Kong, with SMIC and Hua Hong Semiconductor surging 9% and 15%, respectively.