For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek, seen as a benchmark for China’s progress in the fast-moving field.

More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals.

However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight.

Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new system: world-leading US designs or made-in-China alternatives that the country is racing to develop.

“It’s important to know, because at one level, it is a signal of China’s AI self-sufficiency trajectory,” Counterpoint Research principal AI analyst Wei Sun said.

Tech news outlet The Information reported last week that V4 might be run on the latest chips made by China’s Huawei Technologies Co Such a shift would mark a milestone for China in its bid to beat US restrictions on the export of top-of-the-range AI chips from Californian titan Nvidia Corp to the country.

The report cited five people with direct knowledge of large orders for Huawei chips, made in preparation for the DeepSeek launch by tech giants including Alibaba Group Holding Ltd, ByteDance Ltd, and Tencent Holdings Ltd.

DeepSeek, Huawei, Alibaba, ByteDance, and Tencent were contacted, but none were able to comment.

DeepSeek started life in 2023 as a side project of a hedge fund that had access to a cache of powerful Nvidia processors.

It shot to attention in January last year with its R1 deep-reasoning chatbot, which sent US tech shares tumbling with US President Donald Trump calling it a “wake-up call” for US firms.

R1 was based on DeepSeek’s last major AI model, V3, which was released in December 2024.

The company’s affordable, customizable AI tools have been widely adopted in China, and are also popular in emerging markets such as Southeast Asia and the Middle East V4 — said to be multimodal, meaning it can generate text, pictures and video — could again shock US tech valuations, Carthage Capital founder Stephen Wu said.

“I expect the upcoming DeepSeek V4 release will not just be a software update; it will be a highly capable, open-source model that handles massive context windows at a fraction of the cost,” he said.

However, DeepSeek’s reputation as a company at the frontier of AI technology is also at stake.

Its models previously relied on Nvidia chips, so a move to collaborate with domestic chipmakers would require “substantial re-engineering,” Wei said. “That transition can slow development cycles and introduce performance trade-offs, especially for V4, a model expected to be state-of-the-art.”

The US cites national security concerns as the reason for its export ban on Nvidia’s most powerful AI processors to China.

“The ongoing wait for DeepSeek V4 points to friction in scaling advanced models without unrestricted access to top-tier Nvidia hardware,” Wu said However, some reports allege that DeepSeek skirted the ban to train V4 using thousands of Nvidia’s top-end Blackwell chips, dismantled in third countries and smuggled to China.

Training AI models requires huge amounts of computing power — much more than for processing generative AI queries, which is known as inference.

Nvidia did not respond to a comment request, but told The Information it had not seen evidence of this and “such smuggling seems farfetched.”

Another Chinese AI start-up, Zhipu, in January unveiled an image generator that it said had been entirely trained on Huawei chips.

Alibaba this week said it would open a new data center for AI training and inference in southern China, powered by 10,000 of its own chips and operated by China Telecom Corp.

As for DeepSeek, “if they have successfully trained V4 entirely on Huawei silicon, it signals a material shift in the geopolitical tech landscape,” Wu said