A preview of DeepSeek's powerful new V4 model sent a clear signal to China's crowded AI market, showing how quickly competitive tides can turn.
Back
A preview of DeepSeek's powerful new V4 model sent a clear signal to China's crowded AI market, showing how quickly competitive tides can turn.

The preview of DeepSeek's V4 artificial intelligence model on Friday triggered a selloff in competing AI stocks, with Hong Kong-listed Zhipu AI and Minimax falling as much as 6.3 percent and 3.9 percent respectively, signaling investor concern over a reshaped competitive field.
"The market reaction really showed how high expectations are for the upcoming V4," Cissy, a tech columnist, wrote in her #techAsia newsletter, noting the intense market anticipation.
The V4 model, which will have "pro" and "flash" editions, replaces the V3 version launched in December 2024. The stock plunge erased significant value from Zhipu, which has a market capitalization of about $57 billion, and Minimax, valued at roughly $33.5 billion. The drop highlights the perceived threat from DeepSeek, which has built a reputation for high-performance models.
The launch intensifies an already fierce AI arms race in China. It comes as DeepSeek is reportedly seeking its first external funding of over $300 million at a valuation topping $20 billion, money it may need to fend off rivals and retain top talent in a blistering market.
DeepSeek's move toward external financing marks a significant strategy shift. Founded by Liang Wenfeng, who also founded the quantitative hedge fund High-Flyer Quant, the AI firm was largely self-funded and had previously rejected investment offers. However, the massive computing resources required for developing models like V4 have made external capital necessary to keep pace with domestic and overseas rivals.
The fundraising talks, first reported by The Information, have involved major players like Alibaba and Tencent, with valuations for DeepSeek reportedly doubling from $10 billion to $20 billion in a matter of days. This valuation still trails competitors like Zhipu, but reflects the high stakes involved.
The potential new funding is not just for hardware. The AI industry is facing a fierce talent war, and DeepSeek has seen key researchers poached by competitors like Xiaomi and ByteDance with compensation packages reportedly in the tens of millions. Securing a significant funding round would allow DeepSeek to offer competitive packages to retain and attract the top-tier talent needed to develop next-generation models and AI agents.
A key question surrounding the V4 model is the hardware it was trained on. Amid U.S. restrictions on advanced chip exports, there is intense focus on whether Chinese firms can achieve state-of-the-art performance using domestic silicon. DeepSeek has reportedly been working with Huawei to ensure V4 is fully compatible with its Ascend 950PR chips, a move that could signal a major step forward for China's homegrown chip capabilities if performance benchmarks are competitive.
This article is for informational purposes only and does not constitute investment advice.