DeepSeek's UE8M0 FP8 innovation boosts China's AI self-sufficiency with homegrown chip technology

Chinese AI start-up DeepSeek has released a new V3.1 model trained using the UE8M0 FP8 scale data format, suitable for "home-grown chips soon to be released." Analysts and industry insiders believe this could be a significant step towards China's goal of AI self-sufficiency. The move has sparked enthusiasm about an upcoming tech breakthrough that could enhance China's prospects of cutting reliance on imported AI chips like Nvidia's GPUs. Shares of Cambricon Technologies, a local GPU designer, and chip foundries Hua Hong Semiconductor and Semiconductor Manufacturing International Corp have gained significantly.

Chinese AI startup DeepSeek has released a new model, V3.1, trained using the UE8M0 FP8 precision format, which is designed to work with upcoming homegrown chips. This development comes amid China's push for AI self-sufficiency and could signal a significant step forward in its semiconductor industry [1].

DeepSeek hinted that China's next-generation chips, which support the UE8M0 FP8 format, will be launched soon. The FP8 format, or 8-bit floating point, can enhance computational efficiency for AI model training and inference [1]. This announcement follows China's recent calls for AI developers to use domestic alternatives to Nvidia's GPUs [1].

DeepSeek's V3.1 model features "major changes," including faster response times and a hybrid reasoning architecture that supports both reasoning and non-reasoning modes [1]. The company plans to adjust API pricing starting September 6 [1].

Analysts believe this move could benefit local chipmakers like Cambricon Technologies, Hua Hong Semiconductor, and Semiconductor Manufacturing International Corp. These companies have been working on developing an alternative AI chip ecosystem in China, which could be bolstered by the lack of Nvidia's H20 chips in the market [1].

China's AI chipmakers lag behind Nvidia in technological advancement and scale, but recent progress by companies like Huawei suggests that the country is making strides in this area [1].

References:
[1] https://www.cnbc.com/2025/08/22/deepseek-hints-latest-model-supported-by-chinas-next-generation-homegrown-ai-chips.html