Nvidia has firmly denied allegations that Chinese AI start‑up DeepSeek is using its banned Blackwell chips, insisting there is no evidence to support the claims and that the company remains compliant with U.S. export rules.
Background
The controversy began after reports suggested that DeepSeek may have trained its advanced AI models using Nvidia’s Blackwell GPUs, which are prohibited from export to China under current U.S. trade restrictions. These chips are among Nvidia’s most powerful processors, designed for cutting‑edge AI workloads.
DeepSeek drew global attention earlier in 2025 when it launched its R1 reasoning model, which matched the performance of leading U.S. AI systems but at a fraction of the cost. The breakthrough raised suspicions that the company might have accessed restricted hardware.
Nvidia’s Response
- Denial of Claims: Nvidia stated it has not found any evidence that DeepSeek is using restricted Blackwell chips.
- Supply Chain Oversight: The company emphasized that it closely tracks its supply chain and investigates all credible tips.
- “Far‑Fetched” Allegations: Nvidia described the smuggling claims, including reports of “phantom data centers” dismantling servers to sneak chips into China, as unsubstantiated and far‑fetched.
- Compliance: Nvidia reiterated its commitment to U.S. export rules, noting that it continues to adjust product offerings to remain within legal boundaries.
Wider Context
- U.S.–China Tech Tensions: The dispute highlights the ongoing struggle between Washington and Beijing over access to advanced AI hardware. Export restrictions aim to slow China’s progress in frontier AI development.
- Market Impact: Earlier reports of DeepSeek’s alleged chip use rattled investors, contributing to volatility in U.S. tech stocks, including Nvidia’s share price.
- Alternative Paths: Industry experts note that strong AI models can still be built using older hardware or more efficient training methods, meaning DeepSeek’s success does not automatically prove access to banned chips.
Implications
- For Nvidia: Protecting its reputation and investor confidence is critical as it dominates the global AI chip market.
- For DeepSeek: The start‑up remains under scrutiny, though it has not publicly commented on the allegations.
- For Regulators: The case underscores the challenges of enforcing export controls in a globalized supply chain, where smuggling and black‑market activity remain risks.
Nvidia’s denial reaffirms its compliance with U.S. trade rules, but the controversy surrounding DeepSeek illustrates how AI innovation, global competition, and geopolitics are increasingly intertwined. Even unverified reports can disrupt markets and intensify scrutiny of the global AI supply chain.
