US official says DeepSeek aids China's military via AI chips

A senior US official has accused DeepSeek of supporting China’s military and intelligence operations.

The official told Reuters that DeepSeek uses shell companies in Southeast Asia to obtain restricted US-made semiconductors.

The company, based in Hangzhou, has reportedly provided user data to Beijing’s surveillance systems and collaborated with the People’s Liberation Army (PLA).

Procurement records show over 150 mentions of DeepSeek in connection with PLA research institutions, though Reuters could not verify this.

The official also alleged that DeepSeek acquired Nvidia’s H100 chips, which are banned for export to China, by bypassing controls through Southeast Asian data centers.

Nvidia said DeepSeek likely used the H800 version instead and denied violating US export rules.

DeepSeek has not responded to inquiries.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Chinese tech sanctions evasion follows established patterns

DeepSeek’s alleged use of Southeast Asian shell companies to access restricted U.S. chips mirrors tactics previously employed by other major Chinese tech firms.

ZTE Corporation was fined a record $1.2 billion in 2017 for systematically evading U.S. sanctions, after investigations revealed the company had made 283 shipments of controlled technology to North Korea and conducted business with Iran1.

Similarly, ZTE was caught planning to use shell companies specifically to circumvent U.S. export controls, according to internal documents published by the Bureau of Industry and Security2.

The recent investigation in Malaysia examining whether Chinese companies are using servers with Nvidia chips for AI model training demonstrates how export control evasion continues to evolve across Southeast Asian jurisdictions.

This recurring pattern suggests that despite strengthening export controls, determined entities can find creative workarounds, particularly when accessing advanced AI hardware represents a strategic priority.