A little over a year ago a small Chinese artificial-intelligence lab shocked the world. DeepSeek released a pair of models which performed almost as well as the best Western ones, but were built for a fraction of the cost. The market value of Nvidia and other providers of AI infrastructure briefly tumbled as investors fretted (wrongly) that demand for their wares would slow in the face of such a leap in the efficiency of model-making. Yet the release on April 24th of the lab’s new model, called v4, has been greeted with a shrug. Why?
DeepSeek’s latest release hits many of the same heights its predecessor did. (REUTERS FILE PHOTO)
DeepSeek’s latest release hits many of the same heights its predecessor did. According to tests run by the company, the performance of its most powerful “Pro” system falls only marginally short of the models put out by leading American competitors three to six months ago. DeepSeek’s v4 is cheap for customers, too. An introductory offer makes it a thousandth of the price of the best American models for some uses. Even after that rate expires on May 7th, v4 will cost between a tenth and a quarter of American equivalents.
But it seems that, unlike DeepSeek’s previous blockbuster, v4 was not cheap to build. In 2025 the lab eagerly pointed out that the cost of training its AI was about $6m, far below the going rate in the West. The lab’s technical white paper on v4 omits any estimate of this measure. The fact that 16 months elapsed between v4 and its predecessor also hints that oodles of processing power were used to train it.
The release comes at a time when China’s AI scene is increasingly crowded. DeepSeek has faced growing competition both from other independent labs, such as Moonshot and Z.ai, and the country’s internet giants. The Qwen family of models produced by Alibaba, an e-commerce colossus, has sat comfortably atop China’s leader-board for most of the past year. ByteDance, the creator of TikTok, is also the maker of Doubao, China’s most-popular chatbot. Dola, as it is called outside of China, is hugely popular in Mexico, the Philippines and Britain, where it ranks above Google’s Gemini in Apple’s app store.
In China, much of the attention has shifted to the apps built on top of AI. Alibaba puts its Qwen model to use elsewhere in its business, offering a “digital workforce” to merchants using its e-commerce platform, for example. The country’s internet giants are now racing to build AI-powered “super apps” that can facilitate a wide range of digital transactions. Clever models alone are not seen as the way to make money from the technology.
At the same time, DeepSeek has had to contend with greater state meddling. China’s government has been promoting chips made by Huawei, the national semiconductor champion. DeepSeek reportedly tried to train its new model on them, but eventually fell back on Nvidia’s chips instead, adding cost and time. The government seems unlikely to give local AI companies a freer hand any time soon: on April 27th it said that it would block the acquisition of Manus, another of the country’s AI darlings, by Meta, an American social-media giant.
That DeepSeek’s latest release has failed to dazzle is no cause for lament. Anthropic, an American lab, recently judged its leading-edge Mythos model too powerful to release to the public owing to its hacking capabilities. By contrast, the documents accompanying DeepSeek’s v4 do not mention safeguards at all. If Chinese labs do catch up to their American equivalents, they may not show the same restraint.
