China’s DeepSeek faces accusations of training its AI model with banned Blackwell AI chips, though Nvidia says it has found no such evidence.

According to The Information, DeepSeek obtained Nvidia Corp. Blackwell chips through smuggling routes directly from countries that are allowed to purchase the chips. Sources told the Information that computer servers holding the chips were disassembled before entering China.

DeepSeek has not responded to requests for comment on the allegations.

The company grabbed worldwide attention in January after introducing an AI system that matched the performance of top American technology while costing far less to develop.

High-Flyer, a Chinese investment firm, provides financial backing for DeepSeek and had purchased 10,000 Nvidia graphics processing units in 2021, before Washington banned sales of advanced Nvidia chips and similar hardware to China.

President Donald Trump gave Nvidia approval earlier this week to send an older chip model, the H200, to China. However, restrictions on the newer Blackwell chips remain active.

DeepSeek put out a fresh model in September and said it was partnering with Chinese chip manufacturers on the project.

Nvidia disputes smuggling claims

On Wednesday, Nvidia challenged the smuggling claims about DeepSeek and its use of Blackwell technology.

American officials have blocked Blackwell chip exports to China, viewing them as Nvidia’s most sophisticated products, in an attempt to maintain an edge in artificial intelligence development.

The Information reported that DeepSeek acquired chips that entered the country illegally.

A Nvidia representative issued a statement saying the company has not discovered any confirmation of hidden data facilities built to mislead Nvidia and its manufacturing partners, then torn down, moved secretly, and reassembled elsewhere. The spokesperson added that while such smuggling appears unlikely, the company investigates every tip it gets.

“We haven’t seen any substantiation or received tips of ‘phantom datacenters’ constructed to deceive us and our OEM partners, then deconstructed, smuggled, and reconstructed somewhere else … While such smuggling seems farfetched, we pursue any tip we receive.” – Nvidia Spokesperson.

Nvidia has profited enormously from the AI surge because it makes the graphics processing units essential for training AI systems and handling massive computing tasks.

Because this equipment plays such a vital role in AI advancement, Nvidia’s dealings with China have become a contentious issue among American political leaders.

Trump allows older chip sales to China

Trump announced Monday that Nvidia can deliver H200 chips to cleared buyers in China and other locations, with the United States receiving 25% of revenue from those transactions.

Some Republican lawmakers objected to the announcement.

DeepSeek startled American technology companies in January by launching a reasoning model named R1 that climbed to the top of download charts and industry rankings. Experts estimated that R1 was built for a small fraction of what similar American models cost.

Last August, DeepSeek suggested that China would soon produce its own advanced chips to power AI systems.

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