China’s DeepSeek V4 And Qwen Reshape The Open-Source AI Race
China’s DeepSeek V4 And Qwen Reshape The Open-Source AI Race
Publish Date: 2026-04-28 13:19:00
Source Domain: www.forbes.com
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DeepSeek’s Market Move: In April 2025, DeepSeek dramatically reduced the price of its V4-Pro model, offering outputs for as little as $0.87 per million tokens, sparking comparisons and debates regarding its intentions and impact on the AI market.
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Technical vs. Strategic Gaps: Although DeepSeek’s V4-Pro is technically advanced, it still trails behind models like GPT-5.5 and Gemini 3.1-Pro in terms of reasoning capability. The lab’s strategy of cheaper prices may be more about competition and market share than closing this technical gap.
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Alibaba’s Qwen Dominance: Despite the headlines around DeepSeek, Qwen from Alibaba’s research arm has genuinely dominated the open-source AI market, surpassing both US and Chinese models in global downloads and adoption, indicating a structural dominance in the AI landscape.
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Implication of Price Wars: The DeepSeek price cuts exemplify a broader trend of falling token costs across AI, which aligns with the Jevons Paradox; as token costs decrease, AI applications proliferate, signaling a future where AI becomes embedded in nearly every piece of technology rather than a sign of commoditization.
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Foundation Models as the Moat: Rather than being the commoditized layers that immediate headlines suggest, foundation models are actually the underlying substrate that holds the true moat in the AI era. Wrapper startups and resellers may disrupt currently, but ultimate structural value lies in deep, foundational capability.
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Nvidia’s Long-term Resilience: Despite numerous interruptions and claims of disruption in previous years, Nvidia’s stock price has steadily risen, suggesting that the underlying growth in AI demand keeps outpacing perceived threats, supporting the long-term secular trend for AI infrastructure.
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Future Market Dynamics: Investors should focus on whether the AI infrastructure can keep up with growing demand, rather than short-term price cuts or downloads, as these will determine long-term success and value in the AI market.
