The anticipated release of DeepSeek V4 in mid-February is sharpening debate about whether China is positioning itself to reshape the global artificial intelligence landscape, with implications that extend well beyond model benchmarks and into national strategy, energy policy and technology sovereignty.
According to new analysis from ACI Research Affiliate Evan Freidin, DeepSeek V4 could represent one of the most serious competitive challenges yet to leading Western AI platforms, including upcoming generations of ChatGPT, Claude and Gemini. The expectation is not simply incremental improvement, but a continuation of a trajectory that has already disrupted assumptions about how advanced AI systems must be built and operated.
DeepSeek first attracted global attention last year when an earlier model demonstrated performance comparable to GPT-4 while operating at a fraction of the cost. That result was widely described as a “Sputnik moment” for China’s AI sector, particularly because it emerged despite Chinese developers facing restricted access to advanced Western semiconductors. Since then, DeepSeek and peers such as Zhipu AI, MiniMax and Moonshot AI have continued to release models that match or exceed Western benchmarks in specific domains, notably autonomous coding and highly efficient large language model design.
Two recent technical breakthroughs cited in the analysis have further strengthened expectations that DeepSeek V4 will be capable of competing directly with the most advanced Western systems. While details remain limited ahead of release, the focus on efficiency, architectural optimisation and open-source distribution is consistent with China’s broader AI development strategy.
Adoption patterns, however, reveal a sharp divergence between Western economies and the rest of the world. In Australia and other allied nations, use of DeepSeek has remained minimal. Government agencies have banned it from official devices, and cybersecurity firms report that up to 70 per cent of Australian businesses actively block access, driven by concerns around data security, state influence and censorship.
By contrast, uptake across developing economies has surged. DeepSeek’s open-source availability and low compute requirements have made it highly attractive in regions where access to large-scale cloud infrastructure and high-end GPUs is limited. Since August 2025, cumulative open-source downloads of Chinese AI models have surpassed those of Western competitors, marking a significant shift in global AI usage patterns and influence.
For Chief Information Officers and technology leaders in Australia, the strategic implications extend beyond whether DeepSeek itself should be deployed. Freidin’s analysis argues that Australia has much to learn from China’s emphasis on energy-efficient, low-power AI architectures. This is particularly relevant as Australia’s data centre electricity consumption is projected to triple, reaching around six per cent of national grid demand by 2030. In that context, AI models that rely on ever-expanding compute and energy resources may prove difficult to reconcile with capacity constraints and sustainability targets.
The report suggests that while concerns over security and governance are legitimate, excluding Chinese AI technologies entirely from Australia’s field of view risks missing valuable technical insights. Efficiency-driven innovations emerging from Chinese start-ups could inform the design of sovereign AI capabilities that are better aligned with Australia’s environmental, economic and infrastructure realities.
As DeepSeek V4 approaches release, the question for Australian technology leaders is not simply whether the model represents a competitive threat, but what it signals about the future direction of AI development. The global centre of gravity is no longer defined solely by scale and brute-force compute. Instead, efficiency, adaptability and openness are becoming decisive factors.
For Australia, this moment underscores the need for a nuanced AI strategy that balances national security with informed engagement. Understanding how and why Chinese AI developers are achieving these gains may be essential to building a sustainable, competitive and sovereign AI capability in an increasingly multipolar technology landscape.