What's happening
DeepSeek unveiled its V4 AI model preview on April 24, 2026, marking the first major language model optimized specifically for Huawei's Ascend 950 chips for inference tasks. The release bypasses US export controls that have blocked Chinese companies from accessing Nvidia's advanced AI processors. DeepSeek offers two pricing tiers: the V4-Pro at $3.48 per 1 million tokens output and the V4-Flash at $0.28 per 1 million tokens, representing a 12-fold price difference between the premium and standard versions.
Why it matters for markets
The DeepSeek-Huawei partnership accelerates China's AI semiconductor independence, directly impacting Nvidia's revenue streams. Huawei projects $12 billion in AI chip revenue for 2026, representing 60% growth from $7.5 billion in 2025, driven partly by demand for DeepSeek V4 compatibility. Nvidia CEO Jensen Huang confirmed the company's China market share has "dropped to zero," with no data center compute revenue assumed from China in the company's FY2026 outlook. Bernstein analysts estimate Nvidia's China AI GPU market share could fall to 8% from 66% in 2024, representing a potential revenue loss of billions of dollars annually.
Sectors and assets to watch
Chinese semiconductor manufacturers gained immediate market traction from the DeepSeek announcement. SMIC shares jumped 10% in Hong Kong trading on April 24, 2026, as the company manufactures Huawei's Ascend processors that power the new AI model. Huawei Ascend 950PR chip prices rose 20% following the DeepSeek V4 release, indicating strong demand for the domestic alternative to Nvidia's restricted processors. Nvidia (NVDA) faces continued pressure in the $5.44 trillion market cap company's largest growth segment, with shares declining 1.41% on the DeepSeek announcement day.
What to watch next
Monitor upcoming US-China summit discussions regarding technology export controls and potential policy responses to China's advancing AI chip capabilities. Track quarterly earnings reports from both Nvidia and Chinese semiconductor companies to quantify the revenue impact of this technological shift, particularly Huawei's ability to meet its $12 billion AI chip revenue target for 2026.