Chinese artificial intelligence startup DeepSeek has released an upgrade to its flagship V3 model, introducing compatibility with Chinese-made chips and faster processing speeds, Reuters reported.

The upgraded model, DeepSeek-V3.1, features a UE8M0 FP8 precision format designed to optimize performance for “soon-to-be-released next-generation domestic chips,” the company said in a WeChat post. The move underscores Beijing’s push to strengthen its semiconductor ecosystem and reduce reliance on U.S. technology amid Washington’s export restrictions.

DeepSeek has been making headlines this year as one of the few Chinese startups producing AI models that compete with Western systems like OpenAI’s ChatGPT, while touting lower operational costs. The latest update builds on recent improvements to its R1 model in May and an earlier V3 enhancement in March.

According to the company, the new version also introduces a hybrid inference structure, allowing the model to toggle between reasoning and non-reasoning modes. Users can switch modes using a “deep thinking” button on the firm’s app and web platform, which now run on V3.1.

In addition to the technical updates, DeepSeek announced that pricing for its application programming interface (API) — used by developers to integrate its AI capabilities into other apps and products — will be adjusted beginning September 6.

FP8, the 8-bit floating point format embedded in the V3.1 model, is designed to make AI systems more efficient by reducing memory usage while maintaining high-speed performance. However, DeepSeek did not disclose which domestic chipmakers or products the upgrade will support.

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