US authorities are probing whether Chinese AI startup DeepSeek, whose recent AI models triggered market unrest, has been utilizing restricted Nvidia semiconductors. DeepSeek's claims of rivaling leading US tech firms at a fraction of the cost have raised concerns about American companies losing ground in the AI race to China.
U.S. officials are investigating whether Chinese artificial intelligence (AI) startup DeepSeek has been using advanced Nvidia semiconductors that are restricted from being shipped to China . The probe comes after DeepSeek's release of new AI models that it claims rival those made by leading U.S. tech firms but at a fraction of the cost. These models sent shockwaves through the tech world this week, prompting concerns about American firms losing their edge in the AI race to Chinese rivals.
According to multiple reports, including one from Reuters, the Commerce Department is now looking into whether DeepSeek was able to access these banned AI chips. The investigation reportedly stems from suspicions that chip smuggling to China has been occurring out of countries including Malaysia, Singapore, and the United Arab Emirates. Bloomberg also reported that the department is investigating whether DeepSeek was able to obtain high-performance Nvidia chips through third parties based in Singapore. An Nvidia spokesperson told FOX Business that many of its customers have business entities in Singapore and utilize these entities for products destined for the U.S. and the West. The spokesperson emphasized that Nvidia's public filings report 'bill to' not 'ship to' locations of their customers, and stated that Nvidia insists its partners comply with all applicable laws. They added that if Nvidia receives any information to the contrary, they will take appropriate action. The Commerce Department did not immediately respond to FOX Business' request for comment. DeepSeek was also unable to be reached for comment. The reports come as President Donald Trump is scheduled to meet with Nvidia CEO Jensen Huang at the White House on Friday. Huang and Trump are expected to discuss AI, as well as the crucial role of chips and the power needed to train AI models, along with semiconductor manufacturing facilities. DeepSeek has claimed to have used Nvidia's H800 chips, which they could have legally purchased in 2023. However, Reuters was unable to determine whether DeepSeek has utilized other controlled chips that are not allowed to be shipped to China. DeepSeek also apparently possesses Nvidia's less powerful H20s, which can still be legally shipped to China. The U.S. had considered placing restrictions on these chips under the Biden administration, and newly appointed Trump officials are also discussing the possibility. The CEO of AI company Anthropic, Dario Amodei, stated earlier this week that 'it appears that a substantial fraction of DeepSeek's AI chip fleet consists of chips that haven't been banned (but should be), chips that were shipped before they were banned; and some that seem very likely to have been smuggled.' The U.S. has implemented a series of restrictions barring the export of AI chips to China and plans to cap their shipments to numerous other countries
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