Chinese artificial intelligence startup DeepSeek has announced a permanent 75% price cut on its flagship V4-Pro. The decision dramatically changes the balance of power in the local technology market and sheds new light on the availability of domestic computing hardware in the face of US sanctions.
DeepSeek – drastic drop in API costs
In an official statement, the company announced that the cost of accessing the V4-Pro model’s API will drop to a quarter of existing rates. Users will now pay between 0.025 and 6 yuan (approximately US$0.0035 to US$0.83) per million tokens, whereas previously the price was between 0.1 and 24 yuan.
Such a steep discount comes just one month after the official launch of the V4 model. At the time, the Pro version was priced up to twelve times higher than the poorer Flash version. At the time, the company explained this as “limitations in high-end computing power”, which drastically narrowed the availability of the service.
Huawei chip conundrum and US sanctions
The sudden turnaround in DeepSeek’s pricing strategy has sparked speculation about an improved Chinese supply chain. Although the startup has not directly confirmed it, experts link the reduction to an increase in the supply of Huawei Ascend 950 processors, on which DeepSeek bases the performance of its system. Until recently, the company announced that such deep price drops would only be possible in the second half of the year, when large volumes of super nodes from Huawei hit the market.
This situation perfectly illustrates the dynamics of China’s technology sector under pressure from Washington. US export controls prevent Nvidia from selling its most advanced semiconductors in China, which has directly fuelled demand for AI chips from Huawei. On the other hand, separate chip machine restrictions continue to limit Huawei’s ability to massively scale production of the Ascend series.
However, DeepSeek’s move suggests that local players are able to maximise efficiencies and reduce barriers to entry for the business much faster than expected. For the Chinese market, this sends a clear message: access to advanced AI is becoming a mass commodity, which is likely to force the rest of the stakes into an immediate price response.
