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Frontier Labs
The most-watched Chinese labs are not just chasing benchmarks, they are choosing a different theory of how you win. DeepSeek open-weights its models and gives away the efficiency work; Moonshot and Zhipu race on capability and revenue. We follow who ships, who raises, and who the state is quietly backing.
The state of play
- DeepSeek open-sourced V4 in April 2026 under the MIT license, with Huawei Ascend as a primary deployment path: 1.6 trillion parameters and a one-million-token context.
- In June 2026 DeepSeek closed its first outside round, roughly 7.4 billion dollars, with the state-backed National AI Industry Investment Fund the only investor holding a vote.
- The labs are choosing different theories of winning: DeepSeek gives away the efficiency work, while Moonshot and Zhipu race on capability and revenue.
Best issues on this topic
- The Trade-Down
An IDC survey found 47 percent of large US firms now run a Chinese model in at least one use case, and at one point mid-July all five top models on OpenRouter were Chinese. Coinbase, DoorDash, Airbnb and Cursor are named adopters, switching to cut the bill as UBS puts Chinese API prices at 10 to 20 percent of the US alternative.
- The Giveaway
DeepSeek open-sourced an 85% inference speedup. OpenAI found the same trick the same fortnight and kept it secret. One bets on standards, the other on margin.
- The Week the Race Happened
DeepSeek open-sourced V4 under MIT with Huawei Ascend as a primary deployment path: 1.6 trillion parameters, million-token context, coding a hair behind the best Western models. The first sovereign stack.
- The Private Round
DeepSeek closed its first outside round, roughly 7.4 billion dollars at a 50-billion-plus valuation. The founder wrote the biggest check; the only investor with a vote is a state fund.
- The Co-Design
A teardown found part of DeepSeek V4’s architecture was co-designed for Huawei’s Ascend 950DT inference chip. The model and the silicon are now being built for each other.
- The Cutoff
US Commerce ordered a leading AI lab to cut its two most capable models off from all foreign nationals worldwide, then reversed it a week later. Export controls reached model access, and retreated.
These link to the full issues on the newsletter. New pieces on this topic go out in the daily first.
Common questions
Which Chinese AI lab is leading?
DeepSeek is the most influential, both for open-weight releases like V4 and for efficiency work that stretches limited compute. Moonshot and Zhipu compete hard on capability and revenue. The picture shifts release by release.
Is DeepSeek state-owned?
Partly. In June 2026 DeepSeek closed its first outside round of roughly 7.4 billion dollars. Founder Liang Wenfeng wrote the largest check, and the only investor with a vote is the state-backed National AI Industry Investment Fund.