What’s the story
Chinese start-up DeepSeek has introduced a significant advancement in AI with its latest model, DeepSeek-V3.1.
The model utilizes the UE8M0 FP8 precision format, a data processing technique that enhances efficiency by reducing memory usage and accelerating processing speeds.
This innovation is seen as a major step toward China’s goal of self-sufficiency in AI technology and reducing reliance on imported chips such as NVIDIA’s graphic processing units (GPUs).
FP8 format could significantly lower cost of training AI models
Zhang Ruiwang, a Beijing-based IT system architect, noted that the UE8M0 FP8 technique, when combined with complementary methods, could significantly lower the cost of training AI models.
This approach brings substantial improvements to AI stacking by reducing the graphics memory and computing power required, accelerating both training and inference, and making deployment more “engineering-friendly.”
FP8 (floating-point 8) is a lower-precision data format that speeds up AI training and inference while consuming less memory and bandwidth, though it sacrifices some accuracy.
DeepSeek’s UE8M0 innovation
DeepSeek’s UE8M0 innovation offers a variant of the FP8 format that further lowers the requirements for computing power, storage, and bandwidth.
Chip industry analyst Dong Daoli said this development marks a new phase of close software-hardware integration in China’s AI sector.
Dong added that by leveraging the UE8M0 FP8 format, DeepSeek can train large AI models on less powerful chips, enabling China’s advanced AI systems to be developed using domestically produced GPUs, which still fall short of NVIDIA’s performance.
Stocks of Chinese chipmakers surge following DeepSeek’s breakthrough
Shanghai-traded shares of Cambricon Technologies, a domestic GPU designer seen as a potential rival to NVIDIA, surged 20% on Friday.
The stock has more than doubled since a July low, as investors in mainland China bet on its expanding role in supplying homegrown AI chips.
In Hong Kong, Hua Hong Semiconductor shares rose 18%, while Semiconductor Manufacturing International Corp climbed 10%, driven by optimism that these two chip foundries could lead China’s efforts in producing its own GPUs.