Nvidia Dismisses Claims of DeepSeek Using Its Blackwell Chips
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According to a report from the Information, Chinese artificial intelligence (AI) startup DeepSeek, which made waves with its low-cost AI model earlier this year, used Nvidia’s Blackwell chips. These chips, which are Nvidia’s top-of-the-line AI chips, are not allowed to be exported to China, and the company has dismissed reports of them being used in China.
DeepSeek Is Allegedly Using Nvidia Chipa
According to reports citing individuals familiar with the matter, DeepSeek, which has gained attention for developing cost-efficient AI models, has been employing restricted Nvidia Blackwell chips. The method of acquisition is described as a complex smuggling operation wherein the advanced chips were reportedly first shipped to data centers in countries permitted to purchase them. They were then allegedly dismantled from the servers and re-exported, possibly in pieces, to China, bypassing inspection and customs checks.
The use of these cutting-edge chips, particularly the powerful Blackwell series, could grant DeepSeek a significant advantage in the global AI race, which is precisely what US export controls are designed to prevent.
Nvidia Dismisses Reports of DeepSeek Using Its Banned Chips
In response to the accusations, Nvidia has issued a strong denial, stating that the company has “not seen any substantiation or received tips” to support the claim of smuggling through external data centers. Nvidia asserts that it insists its partners comply with all applicable laws.
The controversy has drawn significant attention to Nvidia’s billing practices in Singapore. Public filings have shown that a substantial portion of Nvidia’s revenue, reported to be around 22-28% in some periods, is billed through Singapore.
A Significant Portion of NVDA’s Sales Are Billed in Singapore
However, Nvidia and the Singaporean government have clarified that this figure does not reflect the physical destination of the chips. Nvidia emphasizes that its revenue is reported based on the customer’s billing location. Many large US and European corporations have major business entities in Singapore and use them for centralized invoicing, even if the products are ultimately shipped to data centers in the US or other Western countries. Nvidia stated that “most shipments associated with Singapore revenue were to locations other than Singapore and shipments to Singapore were insignificant.”
Singapore’s Ministry of Trade and Industry (MTI) has also stressed that the physical delivery of products to Singapore accounts for a very small fraction (reportedly less than 1%) of the revenue billed there. While Singapore is an international business hub, its government expects companies to comply with both US export controls and local laws, and has initiated investigations to ensure its trade system is not abused to circumvent global restrictions.
Despite the clarifications, the dramatic surge in revenue billed through Singapore has prompted both the US government and the Singaporean authorities to launch investigations into whether Singapore-based intermediaries were used to illegally route restricted chips, including those going to DeepSeek. In fact, Singaporean police have made arrests linked to fraud concerning the illegal re-export of GPUs.
US Banned Sales of Advanced Nvidia AI Chips to China
The DeepSeek report underscores the persistent challenges faced by the US in attempting to slow China’s technological advancement in AI. The US has repeatedly tightened export restrictions, notably on chips like the A100, H100, and the new Blackwell and Rubin series.
In response, companies like Nvidia have developed modified, less powerful versions of their chips (such as the H800 and A800, now also restricted, and the H20) specifically for the Chinese market to maintain a legal revenue stream. However, the reported use of smuggled, top-tier Blackwell chips indicates that a black market for advanced AI hardware remains active, creating a constant game of “whack-a-mole” for international regulators and raising significant compliance risks for global tech giants.
Trump Approved Sales of Nvidia H200 Chips to China
Meanwhile, reports of DeepSeek using Nvidia’s Blackwell chips come a day after US President Donald Trump announced his administration will allow Nvidia to resume exporting its advanced H200 AI chips to “approved customers” in China.
Trump said that the exports have been allowed “under conditions that allow for continued strong National Security,” to which he added, “President Xi responded positively!”
The export license covers the Nvidia H200 accelerator, which is the company’s second-most powerful AI chip and a substantial upgrade over the previously restricted, lower-performance H20 variant.
The more advanced, next-generation Blackwell (that DeepSeek allegedly used) and upcoming Rubin chip families will remain off-limits to Chinese customers, ensuring that America maintains its technological edge.
China Cautioned Domestic Companies Against Using Nvidia Chips
Notably, China has cautioned domestic companies against using Nvidia chips over fears of backdoors and is instead backing its domestic companies to develop AI chips.
Alibaba is among the Chinese companies that have developed AI chips and even secured a major deal with state-owned telecom company China Unicom to supply AI chips for a new data center. The move underscores Beijing’s accelerating drive for technological self-sufficiency and marks a major victory for domestic chipmakers amid escalating geopolitical tensions and US export restrictions.
Of the nearly 23,000 domestically made AI chips currently powering the initial phase of the data center, Alibaba’s chip unit, T-Head, supplied approximately 72%. The remaining chips were sourced from other Chinese companies, including MetaX, Biren Tech, and Zhonghao Xinying, with plans to procure additional chips from Tecorigin (Wuxi), Moore Threads, and Enflame.
Alibaba Developed AI Chips
A key feature of Alibaba’s new chip is that it is being manufactured by a Chinese company. This marks a significant departure from the past, where Alibaba’s earlier AI processors were fabricated by Taiwan Semiconductor Manufacturing Company (TSMC), a firm that the US has since restricted from producing cutting-edge AI chips for China. This shift to domestic manufacturing is in direct alignment with China’s broader national strategy to build a homegrown semiconductor ecosystem and lessen its dependence on foreign technology.
Nvidia CEO Jensen Huang has cautioned that Chinese companies are fast catching up due to US export control restrictions, even as the general view is that Chinese chips are still a generation behind Nvidia.
