Chinese startup DeepSeek used banned Nvidia chips during the development of its own AI model. According to investigations, the equipment reached the company not directly but via intermediary countries.
Supply route
According to journalistic reports, the graphics processors were initially installed in data centers in third countries, then disassembled and shipped to China in parts. This scheme was used to circumvent export restrictions on advanced chips.
In November, U.S. authorities brought charges against four individuals for attempting to illegally supply Nvidia chips to the PRC via Malaysia, allegedly using a sham real-estate company. Nvidia representatives said they have no confirmation of such actions at this time but are reviewing reports of possible violations.
Claims and purchases
In January 2025 DeepSeek announced the creation of an AI model it considers capable of competing with American counterparts and which, the company claims, was developed at lower cost.
The startup received financial support from Chinese hedge fund High-Flyer, which before the introduction of restrictions purchased about 10,000 Nvidia graphics cards.
Currently, U.S. President Donald Trump has allowed exports to China of the older Nvidia H200 chip model, while restrictions on shipments of the new Blackwell-series processors remain in place.
Military use and models
According to recent reports, the Chinese military has integrated DeepSeek's AI into some military equipment. The company also released an experimental version of its model, V3.2-Exp, aimed at working with large text corpora.
