U.S. State Department warns embassies worldwide about Chinese model distillation.
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DeepSeek on Friday released a preview of its V4 large language model, the Hangzhou-based startup's most powerful to date, with 1.6 trillion parameters and a 1 million token context window. The model is the first major frontier release optimized for Huawei's Ascend AI processors rather than Nvidia hardware, and it arrived on the same day Reuters reported that the U.S. State Department had sent a diplomatic cable to embassies worldwide instructing staff to warn foreign governments about alleged IP theft by DeepSeek and other Chinese AI firms.
V4 comes in two variants: V4-Pro, the flagship, which costs $3.48 per million output tokens, and V4-Flash, a smaller 284 billion parameter version, which costs $0.28. OpenAI currently charges $30 per million output tokens for GPT-5.4, and Anthropic charges $25 for Claude Opus 4.6. DeepSeek, however, acknowledges V4 “falls marginally short” of those closed-source models by roughly three to six months of development, but outperforms every other open-source competitor in agentic coding and reasoning benchmarks .
DeepSeek trained its earlier V3 model on 2,048 Nvidia H800 GPUs , and the company has faced multiple investigations over whether it acquired restricted Nvidia hardware through intermediaries in Singapore.
You may like Anthropic accuses DeepSeek, other Chinese AI developers of 'industrial-scale' copying Nvidia says Chinese military dependence on American technology would be 'nonsensical' New Commerce Department AI export rules could be seismic change for CSPs and data center operators V4 sidesteps that supply chain entirely by training on domestic Ascend chips. Huawei confirmed day-zero compatibility across its full Ascend SuperNode product line, including its latest 950 series processors, and DeepSeek said V4-Pro pricing could fall further once Huawei scales up Ascend 950 production in the second half of this year.
The diplomatic cable, per Reuters , instructed embassy staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation” of U.S. models, naming DeepSeek alongside Moonshot AI and MiniMax. Two days earlier, the White House Office of Science and Technology Policy published a memo accusing Chinese entities of running "deliberate, industrial-scale campaigns" to distill American frontier AI systems.
Those accusations build on claims Anthropic made in February , when the company said DeepSeek, Moonshot, and MiniMax had used 24,000 fraudulent accounts to make 16 million exchanges with its Claude model. OpenAI has also accused DeepSeek of distilling its models.
China's foreign ministry called the accusations "groundless," according to Reuters , and DeepSeek has previously said its V3 model relied on naturally occurring data collected through web crawling and didn’t intentionally use synthetic data generated by OpenAI. The diplomatic cable and the V4 launch both come just weeks before President Trump is scheduled to visit Chinese President Xi Jinping in Beijing for a summit expected to cover semiconductor export controls and IP disputes.
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