China's AI firm DeepSeek is facing accusations of training its artificial intelligence model using banned Nvidia Blackwell chips. However, Nvidia has stated that it has found no evidence to support these claims.
According to a report by The Information, DeepSeek allegedly obtained Nvidia Corp. Blackwell chips through smuggling routes from countries permitted to purchase them. Sources cited in the report indicated that computer servers containing the chips were disassembled before being imported into China.
DeepSeek has not yet responded to requests for comment regarding these allegations.
The company gained significant global attention in January when it introduced an AI system that demonstrated performance comparable to leading American technology, but at a considerably lower development cost.
High-Flyer, a Chinese investment firm, provides financial backing for DeepSeek. This firm had previously purchased 10,000 Nvidia graphics processing units in 2021, before the U.S. government implemented a ban on the sale of advanced Nvidia chips and similar hardware to China.
Earlier this week, President Donald Trump granted Nvidia approval to send an older chip model, the H200, to China. Nevertheless, restrictions on the newer Blackwell chips remain in effect.
In September, DeepSeek released a new model and announced a partnership with Chinese chip manufacturers for its development.
Nvidia Disputes Smuggling Claims
On Wednesday, Nvidia publicly challenged the smuggling allegations concerning DeepSeek and its alleged use of Blackwell technology.
U.S. officials have blocked exports of Blackwell chip technology to China, considering them Nvidia's most advanced products. This move is intended to maintain a technological advantage in the field of artificial intelligence development.
The Information's report detailed that DeepSeek acquired chips that were imported into the country illegally.
A representative from Nvidia issued a statement asserting that the company has not found any confirmation of hidden data facilities designed to mislead Nvidia and its manufacturing partners, which were then dismantled, secretly moved, and reassembled elsewhere. The spokesperson added that while such smuggling operations seem unlikely, the company thoroughly investigates every tip it receives.
“We haven’t seen any substantiation or received tips of ‘phantom datacenters’ constructed to deceive us and our OEM partners, then deconstructed, smuggled, and reconstructed somewhere else … While such smuggling seems farfetched, we pursue any tip we receive.” – Nvidia Spokesperson.
Nvidia has experienced substantial financial gains from the surge in AI development, as it manufactures the essential graphics processing units required for training AI systems and performing large-scale computing tasks.
Due to the critical role of this equipment in AI advancement, Nvidia's business dealings with China have become a subject of contention among American political leaders.
Trump Allows Older Chip Sales to China
On Monday, Trump announced via Truth Social that Nvidia is permitted to deliver H200 chips to authorized buyers in China and other locations. The United States will receive 25% of the revenue generated from these transactions.
Some Republican lawmakers have voiced objections to this decision.
DeepSeek surprised American technology companies in January by launching a reasoning model named R1. This model quickly rose to the top of download charts and industry rankings. Experts estimated that R1 was developed at a fraction of the cost of comparable American models.
Last August, DeepSeek indicated that China would soon be capable of producing its own advanced chips to power AI systems.