DeepSeek allegedly trained new AI model on banned Nvidia Blackwell chips despite US export controls

Exclusive: China's DeepSeek trained AI model on Nvidia's best chip despite US ban, official says

WASHINGTON, Feb 23 (Reuters) - Chinese AI startup DeepSeek's latest AI model, set to be released as soon as next week, was trained on Nvidia's (NVDA.O), opens new tab most advanced AI chip, the Blackwell, a senior Trump administration official said on Monday, in what could represent a violation of U.S. export controls. The official said the U.S. believed DeepSeek would remove the technical indicators that might reveal its use of American AI chips. The official declined to say how the U.S. government obtained the information. Nvidia declined to comment. The Chinese embassy in Washington said in a statement that Beijing opposes "drawing ideological lines, overstretching the concept of national security, expansive use of export controls and politicizing economic, trade, and technological issues." The Commerce Department and DeepSeek did not immediately respond to requests for comment. The official did not provide information on how DeepSeek obtained the Blackwells, but noted that U.S. policy is "we're not shipping Blackwells to China," emphasizing that DeepSeek's possession of the chips could represent an export control violation. The news, not previously reported, could further divide Washington policymakers as they struggle to determine where to draw the line on Chinese access to the crown jewels of American AI semiconductor chips. China hawks fear chips could easily be diverted from commercial uses to help supercharge China's military and threaten U.S. dominance in AI. But White House AI Czar David Sacks and Nvidia CEO Jensen Huang argue that shipping advanced AI chips to China discourages Chinese competitors like Huawei from redoubling efforts to catch up with Nvidia's and AMD's (AMD.O), opens new tab technology. U.S. export controls, overseen by the Commerce Department, currently bar Blackwell shipments to China. In August, U.S. President Donald Trump opened the door to Nvidia selling a scaled-down version of the Blackwell in China. But he later reversed course, suggesting the firm's most advanced chips should be reserved for U.S. companies and kept out of China. Trump's decision in December to allow Chinese firms to buy Nvidia's second most advanced chips, known as the H200, drew sharp criticism from China hawks, but shipments of the chips remain stalled over guardrails built into the approvals. The official declined to comment on how the latest news would impact the Trump administration's decision on whether to allow DeepSeek to buy H200s. The U.S. official also said DeepSeek's Blackwells are likely part of a cluster at its data center in Inner Mongolia, an autonomous region of China. The model they helped train likely relied on the "distillation" of models made by leading-edge U.S. AI companies, including Anthropic, Google, OpenAI, and xAI, echoing allegations made by OpenAI and Anthropic, the official added. The technique known as distillation involves having an older, more established and powerful AI model evaluate the quality of the answers coming out of a newer model, effectively transferring the older model's learnings. Hangzhou-based DeepSeek shook markets early last year with a set of AI models that rivaled some of the best offerings from the U.S., fueling concerns in Washington that China could catch up in the AI race despite restrictions. Reporting by Steve Holland and Alexandra Alper; Editing by Chris Sanders and Sonali Paul Our Standards: The Thomson Reuters Trust Principles., opens new tab

US Claims China's DeepSeek Used Banned Nvidia Blackwell Chips - NVIDIA (NASDAQ:NVDA)

U.S.-China AI tensions intensified after a senior Trump administration official said Washington believes Chinese startup DeepSeek used Nvidia Corp.'s (NASDAQ:NVDA) most advanced chips to train its upcoming model, raising fresh export control concerns. U.S. Flags Potential Blackwell Export Violation A senior Trump administration official said U.S. officials believe Chinese AI startup DeepSeek trained its next AI model, which could launch by next week, on Nvidia's most advanced AI chip, the Blackwell, potentially in violation of U.S. export controls. The official said the U.S. expects DeepSeek to strip out technical indicators that could reveal the use of American AI chips and believes the Blackwell chips are likely clustered at DeepSeek's data center in Inner Mongolia, Reuters reported on Monday. Benzinga has contacted Nvidia's investor relations team for comment and is awaiting a response. The report adds pressure to an already divisive debate in Washington over where to draw the line on China's access to top-tier U.S. AI chips. The Commerce Department's export controls currently bar Blackwell shipments to China. Trump previously signaled openness to Nvidia selling a scaled-down Blackwell in China in August, but later reversed course, arguing the most advanced chips should stay with U.S. companies. China's AI Push And Nvidia's Supply ResponseStrong Global Demand And China's Revenue Potential Despite export uncertainty, Nvidia continues to benefit from robust global AI demand. The company has disclosed a backlog exceeding $500 billion as hyperscalers invest heavily in AI infrastructure. JPMorgan analyst Harlan Sur said U.S. export approvals could unlock billions in additional revenue for Nvidia, making China a significant potential upside catalyst for the stock. Chinese customers continue to show a strong appetite for AI compute, and any easing in export approvals could immediately convert that demand into revenue. NVDA Price Action: Nvidia shares were up 0.37% at $192.25 during premarket trading on Tuesday, according to Benzinga Pro data. Photo by Below the Sky via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

DeepSeek trained upcoming AI model on Nvidia's new AI chip

Chinese AI firm DeepSeek's (DEEPSEEK) latest AI model, which is expected to be released as soon as next week, was trained on Nvidia's (NVDA) most advanced AI chip series called Blackwell, Reuters reported, citing a senior Trump administration official. If Potential US policy violations increase regulatory scrutiny and could create risks for Nvidia and related firms' investor sentiment. DeepSeek's reliance on model distillation from US AI firms could raise intellectual property and competitive concerns for leading US AI companies such as Anthropic, Google, OpenAI, and xAI. Changing US-China chip export regulations, including tariffs and selective approvals, affect Nvidia's and AMD's ability to access the Chinese market and influence their revenue and growth prospects.