Chinese artificial intelligence (AI) startup DeepSeek allegedly relied on banned NVIDIA Corp. semiconductors to develop its latest AI model, according to a report from The Information that has sparked denials from the chipmaker and raised questions about tech export controls.
The online news site, citing unnamed sources, reported DeepSeek obtained NVIDIA’s advanced Blackwell chips through an elaborate smuggling operation. The chips were initially installed in data centers in countries where their sale remains legal, then dismantled and shipped to China after passing inspection by server equipment developers.
NVIDIA disputed the allegations. “We haven’t seen any substantiation or received tips” of such operations, a company spokesperson said, describing the scheme as “farfetched” while acknowledging the company investigates any tips received. DeepSeek representatives did not immediately respond to requests for comment.
The U.S. has banned exports of advanced semiconductors to China as part of efforts to maintain technological superiority in AI. The restrictions have forced Chinese AI developers to seek workarounds, including accessing chips through overseas data centers or illegal channels. In November, federal prosecutors charged four individuals — two Chinese nationals and two U.S. citizens — with orchestrating a scheme to ship prohibited chips to China via Malaysia using a fraudulent real estate company as cover.
DeepSeek captured global attention in January after releasing an AI model that rivaled Silicon Valley’s best offerings while claiming development costs were dramatically lower. The startup, funded by Chinese hedge fund High-Flyer, benefited from the fund’s 2021 acquisition of 10,000 NVIDIA graphics processing units (GPUs) before export restrictions took effect.
The timing of the report is particularly notable given recent policy developments. Earlier this week, President Donald Trump authorized NVIDIA to export an older AI accelerator model, the H200, to approved Chinese customers, with the U.S. government receiving 25% of sales revenues. However, the more powerful Blackwell chips remain under an export ban.
Trump’s decision to permit limited H200 exports drew criticism from some Republican lawmakers concerned about technology transfers to China, reflecting broader debates about balancing economic interests with national security concerns in the rapidly evolving AI landscape.
Beijing has simultaneously pressured Chinese technology companies to rely on domestically produced equipment for AI development. DeepSeek released a model in September and indicated collaboration with Chinese chipmakers, while hinting in August that China would soon possess next generation chips capable of supporting advanced AI systems.
The controversy underscores ongoing tensions over semiconductor technology, which has become central to the U.S.-China technological rivalry. NVIDIA’s GPUs are essential for training AI models and handling large computational workloads, making the company’s relationship with China a political flashpoint among U.S. lawmakers.
