The US Commerce Department is examining whether DeepSeek, the Chinese firm whose AI model has made waves in the tech industry, is using US chips prohibited from being shipped to China, according to a source familiar with the situation.
Last week, China’s DeepSeek introduced a free assistant that claims to utilize less data at a significantly lower cost than American models. Within days, it soared to the top of the App Store charts on Apple, raising alarms about the United States’ dominance in AI and resulting in approximately $1 trillion being wiped off the market value of US technology stocks.
Current restrictions on Nvidia’s artificial intelligence processors are designed to prevent the most advanced chips from being sent to China.
Reports indicate that organized smuggling of AI chips to China has been traced back to countries like Malaysia, Singapore, and the United Arab Emirates, the source added.
“We require our partners to adhere to all relevant laws, and if we receive any information suggesting otherwise, we will take appropriate action,” Nvidia stated.
DeepSeek has claimed it used Nvidia’s H800 chips, which it could have legally obtained in 2023. However, Reuters has yet to confirm whether DeepSeek has used any other restricted chips that are prohibited for shipment to China.
The company also reportedly possesses Nvidia’s less advanced H20s, which are still permitted for shipping to China. The US government contemplated restricting these under the Biden administration, and discussions are ongoing among newly appointed officials from the Trump administration.
Dario Amodei, CEO of AI company Anthropic, remarked earlier this week, “it seems that a significant portion of DeepSeek’s AI chip inventory includes chips that haven’t been banned (but should be), chips that were shipped prior to being banned, and some that likely have been smuggled.”
The US has implemented a series of restrictions that prohibit the export of AI chips to China, with plans to limit shipments to various other nations as well.
