DeepSeek's imminent V4 AI model launch in late April is poised to serve as a critical benchmark for China's domestic semiconductor capabilities, with analysts warning the event could trigger a significant 10% correction in related tech valuations if the Huawei-powered system underperforms. The Hangzhou-based firm's twice-delayed release, now scheduled for the coming weeks, represents a high-stakes test of China's ability to train cutting-edge AI entirely on homegrown silicon—a development that Carthage Capital's Stephen Wu warns 'signals a material shift in the geopolitical tech landscape' with potential ripple effects across global semiconductor markets.
OpenAI, Anthropic, and Google said April 6 they’d share intelligence to stop Chinese companies from copying their models. The three competitors are working together through the Frontier Model Forum, an industry group from 2023.
Anthropic tracked 16 million exchanges from three Chinese firms across about 24,000 fake accounts. The companies allegedly used adversarial distillation, flooding ChatGPT and Claude with queries, then training their models on the responses.
OpenAI accused DeepSeek of copying its models “through new, obfuscated methods” in a February 12 memo to the House Select Committee on China.
The restrictions that started in 2022 to slow China’s AI development first led to chip output dropping 9.8% in 2022. However, those export controls on advanced chips seem to now be backfiring.
Things are shifting. TrendForce projects domestic chips will reach 50% of China’s AI chip market in 2026. Chinese semiconductor equipment went from 25% to 35% of the home market between 2024 and 2025, beating the Made in China 2025 target of 30%.
China has put about $150 billion into chip development. The U.S. CHIPS and Science Act authorized $52.7 billion.
The switch to Huawei chips has not been without delays. As reported by Cryptopolitan previously, DeepSeek was expected to use banned Nvidia chips without revealing any technical signs.
Moving away from Nvidia takes “substantial re-engineering,” according to Wei Sun, principal AI analyst at Counterpoint Research. “That transition can slow development cycles and introduce performance trade-offs, especially for V4, a model expected to be state-of-the-art,” he said.
DeepSeek first gained prominence in January 2024 with R1, a reasoning model President Trump called a “wake-up call” for American companies. The company’s cheap tools are used widely in China and places like Southeast Asia and the Middle East.
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