KEY POINTS
- A senior Trump administration official reported that Chinese startup DeepSeek used Nvidia’s restricted Blackwell chips to train its upcoming AI model.
- The advanced chips are allegedly located in a data center in Inner Mongolia, bypassing strict US export controls designed to limit China’s AI progress.
- DeepSeek is expected to release the new model as early as next week and may attempt to scrub technical data to hide its reliance on American hardware.
The technological rivalry between Washington and Beijing has intensified following reports that a prominent Chinese AI startup bypassed US export bans. A senior Trump administration official stated on Monday that DeepSeek utilized Nvidia’s most advanced Blackwell chips for its latest project. This revelation comes as the Hangzhou-based firm prepares to launch a new, highly anticipated AI model next week.
US authorities believe the restricted hardware is currently clustered in a data center located in Inner Mongolia. The official declined to explain how the government obtained this intelligence or how DeepSeek acquired the prohibited semiconductors. Despite the reported breach, the official emphasized that current US policy remains strictly against shipping Blackwell technology to Chinese entities.
The report suggests that DeepSeek may attempt to eliminate technical “fingerprints” from its software before release to mask the use of American chips. Beyond hardware, officials allege the startup relied on a technique called “distillation.” This process involves using outputs from established models developed by US firms like OpenAI, Google, and Anthropic to accelerate the training of newer, cheaper models.
The news has reignited a fierce debate among Washington policymakers regarding the effectiveness of trade restrictions. Some officials, including White House AI Czar David Sacks and Nvidia CEO Jensen Huang, have previously argued that selling some advanced chips to China could discourage the country from developing its own domestic supply chain. However, critics warn that any access to top-tier hardware could rapidly enhance China’s military capabilities and threaten American AI dominance.
DeepSeek first drew global attention in early 2025 by releasing models that rivaled the best US offerings at a significantly lower cost. The current allegations follow previous reports suggesting the startup may have engaged in sophisticated smuggling operations to obtain high-end GPUs. Neither DeepSeek nor the US Department of Commerce has issued an official response to the specific claims regarding the Blackwell chips.
Nvidia also declined to comment on the report, though the company’s stock remained stable as global demand for AI infrastructure continues to surge. The Chinese embassy in Washington condemned the focus on export controls, accusing the US of politicizing technological issues and overstretching national security concepts. The situation underscores the immense difficulty of enforcing digital blockades in a globally interconnected semiconductor market.
