On January 10, 2025, a revolutionary chatbot called DeepSeek, powered by the DeepSeek-R1 model, made its debut across both iOS and Android platforms, igniting an instant download frenzyOnly 17 days later, by January 27, DeepSeek-R1 had not only caught up but overtook rival ChatGPT, claiming the top spot for free application downloads in the U.S. iOS App StoreThis remarkable achievement highlights DeepSeek's superior technological prowess and product experience, significantly shaking up the global AI market landscapeThe unprecedented success of DeepSeek is being celebrated as a "disruption in AI," heralding a new era in the artificial intelligence arms race, prompting nations around the world to reassess their AI strategiesMany international media outlets have likened this moment to America's "Sputnik moment" in the realm of AI, emphasizing its impact on global AI development trajectories.

In this era of rapid evolution, a pricing war in AI has begun to unfold, with DeepSeek leading the charge towards AI transformationAccording to data from the China Industrial Internet Research Institute, 2024 saw leading cloud providers such as Bytedance's Volcano Engine, Alibaba Cloud, and Baidu Cloud engaging in a fierce price reduction battle for large AI models, with discounts often exceeding 90%. Internationally, OpenAI's launch of its upgraded GPT-4o model in May demonstrated a potent combination of enhanced performance and a 50% price drop from its predecessor, the GPT-4-TurboBy August, GPT-4o's second iteration introduced even more capabilities at a 33% savings on output costsIn China, companies like Alibaba also joined this trend, announcing on December 31 their third round of pricing cuts, with discounts of over 80% on their Tongyi Qianwen visual understanding model.

The scale of both the global and Chinese AI application markets is projected to boomAs reported by IDC, the global generative AI market is set to reach $360.6 billion in 2024, representing an impressive 76% year-on-year growth, and is estimated to hit $2.154 trillion by 2028. Meanwhile, China's AI software market is forecasted to reach $570 million in 2024, with predictions indicating an ascent to $3.54 billion by 2028. The symbiotic relationship between accessible pricing and increased returns on AI investments serves as a catalyst for a flourishing AI economy.

In addition, the compression of edge inference costs is propelling widespread adoption of AI across various sectors

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We are witnessing an exciting new era of innovation for end-user devices, with AI-driven smartphones, advanced personal computers, and an array of other terminal products poised for rapid growth in the coming yearsThe functional demands of AI applications necessitate robust computational and communication capabilities, pushing for the development of increasingly complex AI-enabled devicesAs a consequence, the number of components in these devices is predicted to rise dramatically alongside an anticipated increase in power consumption, necessitating larger battery capacitiesThis trend is expected to fuel advancements in printed circuit board (PCB) technologies, aimed at achieving lighter, thinner, and faster designsHigh-density interconnect (HDI) and flexible printed circuits (FPCs) are likely to become more prevalent in terminal products due to their advantages in high-density and lightweight applications.

AI glasses are emerging as next-generation hardware products uniquely positioned to accommodate a myriad of AI applications, attracting various players in the marketCompanies that specialize in mobile algorithms are expected to benefit significantly from this budding sectorFor instance, the Consumer Electronics Show (CES) 2025 showcased a staggering 47 different AI and augmented reality (AR) glasses models, offering features such as photo capture, AR display, voice interaction, and translationAs competition intensifies, projections by Wellsenn suggest that the global market for AI smart glasses will witness a surge in new product launches by 2025, with estimated shipments reaching 4 million units and potentially expanding to 8 million units by 2030.

Meanwhile, the market for AI headphones is set to experience explosive growth in ChinaWith artificial intelligence increasingly entering the mainstream, Chinese manufacturers have deftly integrated AI technology into products featuring active noise cancellation and spatial audio

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A standout segment within this space is the active noise control (ANC) AI headphones, which have garnered attention for their exceptional performanceAccording to data by Lotu Technology, by August 2024, AI-enabled headphone sales accounted for 1.4% of total sales, reflecting a staggering 763% year-on-year increase in volume and a remarkable 1,447% increase in revenueThis signals the transition of AI headphones into a robust growth phase.

Furthermore, China's three major telecom operators—China Telecom, China Unicom, and China Mobile—have all integrated the DeepSeek model, marking a significant milestone for AI's computational capacityThe formal announcements from these operators began on February 1, with China Telecom, followed by China Unicom on February 3 and China Mobile on February 5, making DeepSeek the first domestically developed AI model to gain traction with all three telecom giants.

China Telecom will leverage its "Xirang" intelligent computing platform to support DeepSeek-R1's inference and training processes across multiple business applicationsConcurrently, China Unicom plans to embed the model within its product suite while pre-installing it in various cloud service hubs across several locationsChina Mobile aims to provide comprehensive model support, optimizing its integration through smart computing and cloud platforms to enable flexible access to DeepSeek's capabilities.

The commitment from these telecom giants to incorporate DeepSeek has significantly heightened the demand for computing power, propelling an increased procurement of GPU (graphics processing unit) and FPGA (field-programmable gate array) chipsIn the short term, this surge in demand may lead to an uptick in chip pricesChip manufacturers are consequently focusing on research and development, driving innovation toward the creation of high-performance, low-power chips

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