Chinese artificial intelligence startup DeepSeek has unveiled DeepSeek-V3.1, an upgraded version of its flagship model designed to work seamlessly with domestically produced chips, a move that underscores China’s determination to reduce dependence on U.S. technology. The release also promises faster performance and improved efficiency, Reuters confirmed Thursday.
According to the company’s announcement, the new model introduces compatibility with “soon-to-be-released next-generation domestic chips” and leverages the UE8M0 FP8 precision format to boost speed and efficiency. FP8 — or 8-bit floating point — allows AI systems to use less memory while delivering faster processing, a critical feature as China races to build a self-reliant semiconductor ecosystem amid U.S. export restrictions.
The V3.1 update also introduces a hybrid inference system, allowing users to switch between reasoning-intensive and standard processing modes. A new “deep thinking” toggle has been added to the DeepSeek app and web platform, giving users flexibility in how they engage with the model.
This launch comes at a time when Beijing is intensifying efforts to strengthen its domestic chip industry and reduce reliance on American hardware. “The focus on domestic chip compatibility may signal that DeepSeek’s AI models are being positioned to work with China’s emerging semiconductor ecosystem as Beijing pushes to replace U.S. technology in the face of Washington’s export restrictions,” Reuters reported.
DeepSeek has rapidly built a reputation as a disruptive player in the AI landscape. Earlier this year, the company gained international attention for releasing models that rival OpenAI’s ChatGPT at significantly lower operating costs. Its V3 model outperformed competitors including Meta’s Llama 3.1, OpenAI’s GPT-4o, and Alibaba’s Qwen 2.5 on independent benchmarks, while offering more affordable pricing for developers and businesses.
The startup has also launched a global chatbot app, which quickly climbed the charts, surpassing ChatGPT on Apple’s App Store in January. This surge in popularity rattled global tech stocks and drew increased scrutiny from regulators.
With the release of V3.1, DeepSeek is also adjusting its API pricing model starting September 6, reflecting growing demand from developers seeking cost-effective alternatives to Western platforms.
By aligning its AI technology with China’s emerging chip ecosystem, DeepSeek is positioning itself as both a technological innovator and a strategic player in Beijing’s push for semiconductor independence.
