DeepSeek used Nvidia chip for AI training despite US ban: official

China’s AI startup DeepSeek reportedly trained its latest model using Nvidia’s advanced Blackwell chips, according to a senior US government official.

The official indicated that DeepSeek may have removed technical indicators to hide the chips’ use, which could violate US export controls.

Nvidia declined to comment, and the Chinese embassy in Washington criticized what it called the politicization of trade and technology issues.

US policies prohibit Blackwell chip shipments to China, and the official did not specify how DeepSeek acquired the chips.

The chips are believed to be housed at a data center in Inner Mongolia, with the training process possibly involving models from US companies like OpenAI and Google.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Restricted chips flow through a sophisticated gray market

Deals for restricted Nvidia chips appear repeatedly, not as one-off purchases.
The U.S. House Select Committee alleged DeepSeek dodged export rules by using restricted Nvidia graphics processing units (GPUs) supplied via Singapore-based third parties 1.
Some traders route hardware through other countries, which can hide the end buyer and break U.S. rules that block advanced Nvidia chip shipments to China.
Singaporean authorities investigated server exports to Malaysia that were suspected of containing Nvidia chips potentially subject to U.S. export restrictions, and sought more information to determine the servers’ final destination 2.
Tom’s Hardware reported that the U.S. Department of Justice shut down a China-linked smuggling network that allegedly sent tens of millions of dollars’ worth of H100 and H200 GPUs to China by falsifying documentation and relabeling hardware 3.

China’s AI buildout faces a glut of underused data centers

Reports of DeepSeek chasing top chips land amid a national surplus of AI computing capacity.
As of early 2025, estimates suggest up to 80% of China’s newly built computing resources remain unused 4.
Local governments and non-tech firms joined the rush, including a textile company that built data centers to align with national strategic priorities 4.
The Inner Mongolia site where DeepSeek’s chips are believed to be housed fits this expansion. Separately, a facility in Hohhot (Inner Mongolia) has been described as the largest single intelligent computing center among global telecom operators 5.
Many centers came from inexperienced builders or remote locations, which leaves empty racks even as leading AI teams hunt for scarce high-end chips 4.