Tech Morning Brief: DeepSeek Tests Image Recognition, Hua Hong Semiconductor Supply Disruption

Introduction

On April 29, a wave of major tech stories broke simultaneously. From DeepSeek quietly launching a gray-scale test of its "image recognition mode," to the U.S. reportedly suspending partial supplies to Hua Hong Semiconductor — prompting an official Chinese response — to East Buy's massive equity incentive plan, today's tech morning brief is packed with developments.

DeepSeek Gray-Scale Tests 'Image Recognition Mode,' Filling a Multimodal Gap

DeepSeek has recently begun rolling out an "image recognition mode" to select users, enabling them to upload images for content understanding and analysis. This marks DeepSeek's official entry into the multimodal large language model arena, upgrading from pure text-based interaction to mixed image-text comprehension.

Previously, DeepSeek had risen rapidly in the LLM space thanks to its powerful reasoning capabilities and open-source strategy, but its lack of image understanding was widely regarded as a notable shortcoming. The internal testing of this image recognition mode signals that DeepSeek is accelerating its efforts to catch up with international competitors such as GPT-4o and Claude, which already possess visual capabilities.

Industry analysts suggest that if DeepSeek can achieve a high standard of image understanding, it will further solidify its position in the top tier of Chinese-made large models while opening up greater commercial potential in high-frequency use cases including document parsing, chart analysis, and OCR.

U.S. Reportedly Suspends Partial Supplies to Hua Hong Semiconductor; China Responds

Foreign media reports suggest that the U.S. has reportedly suspended the supply of certain equipment and technology to Hua Hong Semiconductor. As a major wafer foundry on the Chinese mainland, Hua Hong focuses primarily on mature-node chip manufacturing, covering power devices, analog chips, MCUs, and other segments.

In response, China has stated its firm opposition to the U.S. politicizing and weaponizing trade and technology issues, urging Washington to cease its unreasonable suppression of Chinese companies. China will take all necessary measures to firmly safeguard the legitimate rights and interests of its enterprises.

Notably, Hua Hong Semiconductor's operations are concentrated at the 28nm node and above — mature process technologies rather than advanced nodes. If the U.S. extends restrictions even to mature-node supply chains, it would represent a significant escalation of semiconductor blockades against China and could have far-reaching implications for the global chip supply landscape.

East Buy Rolls Out HK$400 Million Equity Incentive for 300 Employees, Averaging Over HK$1.4 Million Each

Following a turbulent period of anchor departures, East Buy has announced a large-scale employee incentive plan: approximately 300 employees will be granted company shares with a total market value of around HK$400 million, averaging over HK$1.4 million per person.

The move is widely interpreted as East Buy's effort to stabilize its workforce after the loss of key talent. The successive departures of several top-tier anchors had previously raised market concerns about the company's operational sustainability. By locking in its core team through generous equity incentives, management is demonstrating confidence in the company's long-term prospects while sending a clear "talent-first" signal to the market.

Other Headlines at a Glance

Beijing Bans Drone Sales and Flights Starting May 1: The Beijing Unmanned Aircraft Management Regulation takes effect on May 1, strictly prohibiting the sale and leasing of drones and core components within Beijing. Individuals face fines of up to RMB 5,000, while organizations face up to RMB 10,000. The new rules impose unprecedented comprehensive controls over drone sales, storage, and flight operations.

OnePlus and realme Merge: OnePlus and realme have announced a merger, forming a sub-brand business unit with Billy Zhang (Li Bingzhong) as general manager. The consolidation will help optimize resource allocation within the OPPO ecosystem and strengthen competitiveness in the mid-range market.

Alibaba Boosts High-Performer Incentives: Alibaba has announced that year-end bonuses for high-performing employees will increase by one to two months' salary, and the first-year vesting ratio for new employee long-term incentives will rise to nearly one-third — a strong signal of increased investment in talent.

SpaceX Board Approves Musk's Mega Compensation Plan: The SpaceX board has approved a compensation plan for Elon Musk under which he could receive approximately 200 million shares in stock awards if milestones related to market capitalization growth and Mars colonization are achieved.

Bawang Chaji 'Mercury' Incident Reversed: An official investigation has confirmed that a viral claim of mercury being found in a Bawang Chaji (CHAGEE) beverage was fabricated — the foreign substance was planted by the purchaser themselves, dramatically reversing the narrative.

Editor's Observations

Today's tech developments reveal several clear themes: First, the capability boundaries of Chinese-made AI large models continue to expand — DeepSeek's multimodal upgrade is set to trigger a new round of competition. Second, the U.S.-China tech rivalry is spreading from advanced to mature process nodes, further intensifying uncertainty in the semiconductor supply chain. Third, internet companies are doubling down on talent competition — whether through East Buy's equity incentives or Alibaba's compensation adjustments, the industry is reassessing the value of core talent.

These shifts, taken together, outline the defining keywords of China's tech industry in 2025: self-reliance, the multimodal race, and a talent-first philosophy.