Key Points
- Chinese AI firm DeepSeek allegedly used smuggled, banned Nvidia Blackwell chips for its AI development.
- The chips were reportedly taken from servers in other countries and then shipped to China to bypass U.S. export bans.
- The smuggling occurred despite the U.S. recently allowing the sale of an older Nvidia chip to China.
- Beijing is simultaneously pushing its tech companies to use homegrown chips, creating a complex situation.
A new report claims that the Chinese artificial intelligence startup DeepSeek has been using banned, high-end Nvidia chips to develop its latest AI model. According to The Information, the company managed to obtain Nvidia’s powerful Blackwell chips by smuggling them into the country.
The U.S. government has strict bans on the sale of these advanced semiconductors to China, forcing AI developers there to find creative and often illegal ways to obtain the hardware. The report, citing unnamed sources, details a specific method: the chips were installed in data centers in other countries where their sale is legal. The servers were then dismantled, and the valuable chips were shipped to China.
This isn’t the first time such a scheme has come to light. The U.S. has previously charged individuals with similar plots to sneak advanced technology into China.
DeepSeek, a company funded by the Chinese hedge fund High-Flyer, first gained international attention in January for building a powerful AI model at a surprisingly low cost. The startup was already sitting on a stockpile of older Nvidia GPUs purchased before the U.S. export bans took full effect.
The news comes even as the Trump administration recently permitted Nvidia to sell an older, less powerful AI chip—the H200—to China. The more advanced Blackwell chip remains strictly forbidden.
At the same time, Beijing has been pushing its own tech companies to use domestically made chips to build out their AI capabilities. For its part, Nvidia told The Information that it has not seen any proof of this smuggling method.
