Chinese tech tyro DeepSeek has launched a new AI model with “drastically reduced costs” and as such is set to once again rattle the Magnificent Seven.
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The DeepSeek-V4 features an “ultra-long context,” it said through a statement on social media platform WeChat. For those not so au fait with AI, context length is how much information input a language model is able to absorb to help it complete its tasks.
V4 supports a context length of one million “tokens” — small components of text including words or punctuation — putting it on par with Google’s (GOOGL) Gemini. On X, DeepSeek added that it was “world leading with drastically reduced compute and memory costs.”
The new V4 comes in two versions, DeepSeek-V4-Pro and DeepSeek-V4-Flash, with the latter being “a more efficient and economical choice” because it has smaller parameters. V4-Pro has 1.6 trillion parameters while the V4-Flash has 284 billion parameters, which refine models’ decision-making ability.
Optimized for AI Agents
DeepSeek said that in terms of “world knowledge”, a benchmark for reasoning, V4-Pro trails only the latest Gemini model.
The model has also been “optimized” for popular AI Agent products such as Claude Code, OpenClaw, OpenCode and CodeBuddy, the DeepSeek statement said.
A “preview version” of the open source model is now available, the company said, without saying when a final version would be released.
Analysts said that V4’s arrival marks an “inflection point” in terms of hardware and cost. “This addresses the long-standing issues of slower performance and higher costs associated with long context lengths,” said Zhang Yi, the founder of tech research firm iiMedia. “For end users, this will bring widespread, accessible benefits. For instance, if ultra-long context support becomes a standard feature, long-text processing is expected to move beyond high-end research labs and enter mainstream commercial applications,” he said.
AI industry analyst Max Liu said it was a “milestone” moment for China. “It’s a good thing for the entire domestic AI industry,” he said. “This is no less shocking than when DeepSeek first came out if its new model indeed matches the performance of leading models from Western labs.”
Last January, Magnificent Seven stocks, such as Nvidia (NVDA) and Meta Platforms (META) were bashed by the launch of DeepSeek’s R1 model, which was just as effective as existing models but cheaper. Its supporters, including President Xi who is committed to winning AI superiority over the U.S., will hope that history will repeat itself.
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