Chinese artificial intelligence startup DeepSeek is said to have relied on Nvidia Corp. chips that are banned from sale in China to develop an upcoming AI model, according to a report by The Information. Sources cited by the publication claim that Nvidia’s Blackwell chips were smuggled into China via countries where the chips were legally sold, installed in data centers abroad, dismantled, and then shipped to China.
The U.S. government prohibits sales of these advanced semiconductors to China, prompting some AI developers to seek alternative methods to obtain the hardware, including accessing chips through foreign data centers. Earlier this year, U.S. prosecutors charged four individuals in a scheme involving Malaysia to illegally ship Nvidia chips to China.
DeepSeek gained global attention in January for releasing an AI model competitive with Silicon Valley benchmarks, reportedly built at a fraction of the typical cost. The startup received funding from the Chinese hedge fund High-Flyer, which had acquired 10,000 Nvidia GPUs in 2021 before U.S. export restrictions on advanced chips were implemented.
A representative for DeepSeek did not respond to requests for comment. Nvidia stated that it “hasn’t seen any substantiation or received tips” supporting the report, adding that while such smuggling seems unlikely, the company investigates any credible information it receives.
The story highlights ongoing tensions in the U.S.-China technology rivalry. Earlier this week, former President Donald Trump authorized Nvidia to export an older AI accelerator, the H200, to China, though the ban on the more powerful Blackwell chips remains in place. Meanwhile, Beijing continues to encourage domestic chip development for AI applications, with DeepSeek reportedly collaborating with Chinese chipmakers on its latest model.
Bloomberg has also covered the broader context of U.S. chip export controls and their impact on the Chinese AI industry, noting the pressure these restrictions place on startups like DeepSeek to secure advanced hardware.
