The emergence of DeepSeek as a transformative force in edge AI development has supply chain operators anticipating a new wave of consumer upgrades across smart devices, from smartphones to AI PCs.
Growing momentum in edge computing
As artificial intelligence maintains its position at the technology frontier, cloud service providers (CSPs) continue their intense competition to strengthen computing infrastructure. This rivalry has invigorated the information and communication technology sector in recent years. The steady improvement in GB200 server rack shipments has reinforced supply chain optimism regarding AI sector prospects for 2025. However, DeepSeek's introduction during the Lunar New Year has disrupted market dynamics, as its affordable AI models prompt a reevaluation of growth projections.
Despite the advent of these cost-effective AI models, existing clients, including CSPs, maintain their capital investment levels. Foxconn Chairman Young Liu recently observed that the proliferation of affordable AI models would ultimately strengthen the broader market. Industry experts widely agree this development will catalyze growth in both edge AI and edge computing markets.
Supply chain insiders contend that while cloud-based CSPs drive substantial computing power demand, the edge AI sector presents a more scalable opportunity for industry participants. Previously limited by high AI model training costs, the industry had identified edge AI and edge computing as primary growth drivers. The widespread adoption of affordable AI models now enables expanded edge AI applications across various sectors, potentially triggering a new upgrade cycle for smart devices, particularly AI PCs.
Industry experts emphasize that AI PCs, driven by application service requirements, demand specific computing power thresholds, positioning them primarily in the mid-to-high-end market segment. DeepSeek's arrival not only facilitates new application launches but also offers potential reductions in computing power requirements, potentially accelerating AI PC market penetration.
Beyond AI PCs, the smartphone sector stands to benefit from affordable AI models, increasing the likelihood of consumer upgrade cycles.
Expanding horizons with Apple Intelligence
Industry sources indicate Apple plans to expand its Apple Intelligence capabilities. By 2025, the multilingual system will extend beyond English-speaking markets to support Chinese, French, German, Italian, Japanese, Korean, Portuguese, Spanish, and Vietnamese languages. This expansion is expected to positively influence iPhone sales throughout 2025.
AI application services continue driving upgrade demand, whether through the proliferation of affordable AI models or new capabilities like Apple Intelligence, promising significant user experience enhancements.
The ultimate impact of these developments will depend on how effectively these AI-powered services deliver practical solutions to end users.
