[DigitalToday Seung-a Yoo] The launch of DeepSeek’s latest artificial intelligence model, V4, is expected to trigger a broader revaluation of China’s AI industry, a forecast said.

On May 3 (local time), the Hong Kong-based South China Morning Post reported that the launch could lift demand for Chinese high-performance chips and expand the scope of AI commercialisation.

Hangzhou-based DeepSeek unveiled its V4 series and said it was a powerful open-source platform capable of competing with U.S. rivals such as OpenAI and Anthropic. DeepSeek said the model posted top-tier performance in coding benchmarks and showed competitiveness in inference and agent-based tasks.

Market attention is focused less on the model itself than on how widely benefits may spread. Mainland Chinese AI chipmakers are being cited as direct beneficiaries, and chip designers such as Cambricon Technologies, Moore Threads, Hygon Information Technology and Metax Integrated Circuits were named. Foundry firms including SMIC and Hua Hong Semiconductor were also classified as potential beneficiaries.

Su Lingyao (수링야오), an analyst at BOC International, a brokerage affiliated with China International Capital Corp, assessed that V4 has lowered barriers to using high-performance AI models. Su said small and medium-sized firms and individuals can use AI functions at lower cost, and that V4’s high compatibility with Chinese chips could bring forward commercial deployment of AI computing in China.

Expectations for market growth are also reflected in figures. Guotai Haitong Securities forecast China’s AI chip market will expand from 142.5 billion yuan in 2024 to 1.34 trillion yuan in 2029. The compound annual growth rate is 54 percent. The Shanghai STAR Market 50 Index rose 25 percent in April to near its highest level in 5 years, and Cambricon shares hit a record high last week.

Large language model (LLM) companies have also emerged as revaluation targets. The view is that if DeepSeek’s low-cost, high-performance strategy reduces AI adoption costs, commercialisation opportunities could expand for companies such as MiniMax and Zhipu AI. Morgan Stanley assessed that Chinese models deliver performance similar to U.S. rivals while inference costs are only 15 to 20 percent of the level. It also analysed that MiniMax is undervalued relative to its growth prospects.

A shift in pricing policy is also being detected. Major companies raised product prices between the second quarter of last year and the first quarter of this year. Morgan Stanley judged that based on performance improvements, they are moving away from simple low-price competition toward performance-based monetisation. This suggests Chinese AI model companies are seeking to improve profit structures beyond cost competitiveness.

The possibility of capital inflows into Hong Kong stocks has also been raised. Morgan Stanley forecast that MiniMax and Zhipu are likely to be included in the Hang Seng Tech Index in June. Their combined weighting is expected at 5 to 7 percent, and it estimated that this could bring up to $1.75 billion in passive inflows. It also predicted that if the two companies are included in a cross-trading programme by August, buying by mainland investors could also increase.

The V4 launch also coincided with a rebound in U.S. technology stocks. The Nasdaq 100 Index recovered all of last month’s losses tied to an oil price shock and set a record high. The market sees big tech earnings as having been only limitedly affected by disruptions to oil supplies, and expects continued hyperscaler investment in AI infrastructure to have a positive impact on earnings at Asian semiconductor companies.

DeepSeek’s strategic significance is becoming clearer within China’s technology ecosystem. Analysts forecast that because V4 has a structure optimised for Chinese chips, it will strengthen its role within the domestic technology stack even under a sanctions environment.

Separately, DeepSeek was reported to be in talks with Tencent Holdings and Alibaba Group Holding to secure its first external investment. In this way, V4 is emerging as a key variable that goes beyond a simple model launch, affecting China’s AI chipmakers, model companies, foundries and broader capital market flows.