The U.S. Commerce Department is investigating whether DeepSeek, a Chinese company whoseAI models have stunned the tech world with their performance, used chips banned from export by the U.S., according to people familiar with the matter.
China’s DeepSeek last week launched a free assistant that it said uses less data and costs a fraction of the U.S. model. Within days, it became the most downloaded app on Apple’s App Store and raised concerns about the U.S. lead in AI, sparking a sell-off that wiped out about $1 trillion in market value from U.S. tech stocks.
Current restrictions on Nvidia’s AI processors are aimed at blocking its most advanced chips from entering China.
Organized smuggling of AI chips into China has been traced to countries including Malaysia, Singapore and the United Arab Emirates, the sources said.
The U.S. Commerce Department and DeepSeek did not immediately respond to requests for comment.
An Nvidia spokesman said many of the company’s customers have business entities in Singapore and use them to make products for shipment to the U.S. and the West.
Nvidia said: “We insist that our partners comply with all applicable laws, and we will take appropriate action if we receive any information to the contrary.”
DeepSeek said it used Nvidia’s H800 chip, which can be legally purchased in 2023. Reuters could not determine whether DeepSeek used other regulated chips that are not allowed to be shipped to China.
DeepSeek also apparently has Nvidia’s lower-performance H20 chips, which can still be legally shipped to China. The United States has considered controlling these products during the Biden administration, and new Trump officials are also discussing it.
Dario Amodei, CEO of artificial intelligence company Anthropic, said earlier this week that “a significant portion of DeepSeek’s AI chip inventory appears to be chips that are not banned (but should be banned), chips that have been shipped before they were banned, and some chips that appear to be very likely smuggled.”
The United States has implemented a series of restrictions banning the export of AI chips to China and plans to restrict exports to many other countries.
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