DeepSeek plans to make its own AI chips to sidestep US export controls and reduce Nvidia reliance

Facing US export controls, China's DeepSeek plans to make its own chips

DeepSeek, the Chinese startup developing large language models that are competitive with those from US companies like OpenAI and Anthropic, is planning to enter the silicon business, according to Reuters. Citing three people familiar with the matter, Reuters writes that DeepSeek has been working on a move into silicon for about a year. It has been meeting with potential partners in the hardware and silicon space and has been hiring engineers for the project. The focus is on data center chips for inference, not training, and the goal is likely to reduce reliance on both Huawei and Nvidia. Nvidia is the chipmaker for most AI companies in North America and Europe, but a United States export ban has prevented the company from achieving a similar presence in China. Huawei controls about half of the data center chip market there, and DeepSeek isn't the only one trying to enter; Chinese tech giants like Alibaba and Baidu have been making moves, too. While chip export controls in the US are a major reason this is an urgent concern for DeepSeek, US-based AI companies are making similar chip plans. For example, OpenAI and Broadcom jointly announced Jalapeño, the former's first chip designed for inference at scale, just a couple of weeks ago. Anthropic, too, has been exploring custom chip design, though there have not been any publicly visible milestones yet. In OpenAI's case, it's partly a play to reduce its reliance on Nvidia, but it's also a desire to have Apple-like control over the entire tech stack for its products. Further, getting in at the silicon and data center levels can be an advantage in a market where data center access is likely to remain constrained, with multiple companies competing for compute as they scale up their AI models and services.

EXCLUSIVE: China's DeepSeek developing its own AI chip, sources say

July 7 (Reuters) - Chinese startup DeepSeek is developing its own AI chip, according to three people familiar with the matter, a push that could reduce its reliance on Nvidia (NVDA.O), opens new tab and Huawei chips, which it has depended on to train and run its globally popular models. The chip is designed for inference -- the stage of AI computing in which a trained model generates responses for users -- rather than for training new models, the sources said. If successful, DeepSeek's expansion into semiconductor development would mark a major strategic shift for a company widely hailed in China as the country's AI champion, potentially adding to challenges faced by Chinese tech giant Huawei. DeepSeek rose to global fame more than a year ago after releasing two highly efficient AI models that went viral worldwide, surprising many in Silicon Valley and Washington. The company has long been known for emphasizing AI model breakthroughs rather than commercializing its technology. Although Huawei's offerings still lag Nvidia's most advanced chips by a wide margin, a U.S. ban on their exports to ⁠China has helped Huawei gain around half of the $50 billion domestic AI chip market, supplying DeepSeek and several other leading industry players. However, Huawei's hold on the market is already weakening as tech rivals Alibaba (9988.HK), opens new tab and Baidu (9888.HK), opens new tab develop their own AI chips and gain market share. DeepSeek's effort to join that race remains at an early stage, with the company reaching out to external partners and holding discussions with chip-design, foundry and memory companies, the three sources said. The effort began about a year ago, one of the people said. The Hangzhou-based company has also increased hiring of chip-design engineers in recent months, but recruitment has been done privately without job postings on public hiring platforms, two of the sources said. All three people declined to be identified because the information is not public. Despite becoming a standard-bearer of China's AI ambitions, DeepSeek has kept a low profile. The company did not respond to a request for comment. FOLLOWING GLOBAL TRENDS With an in-house chip, DeepSeek would be joining other global AI developers in seeking greater control over the hardware behind their models and reduced dependence on Nvidia's. OpenAI last month unveiled Jalapeno, its first custom inference chip, developed ⁠with Broadcom, while Anthropic has been weighing building its own AI chips, Reuters reported in April. For DeepSeek, the effort carries an added strategic dimension. U.S. export controls bar Chinese companies from buying Nvidia's most advanced chips, and Beijing has been pressing its technology champions to build domestic alternatives. DeepSeek founder Liang Wenfeng said in a rare 2024 interview with a Chinese media outlet that chip export controls were a challenge for the company. DeepSeek has used both Nvidia and Huawei chips. The company has said the foundation model underpinning R1, the reasoning model whose low-cost performance triggered a rout in U.S. tech stocks in January 2025, was trained ⁠on Nvidia's H800, a chip designed for the Chinese market that Washington banned in late 2023. The company has since leaned increasingly on Huawei. In April it released its V4 model adapted for Huawei's Ascend chips, and Huawei said its processors were used in part of the training of V4-Flash, a lighter version of the model. Orders for Huawei's Ascend 950 chips from Chinese tech conglomerates surged after the launch, Reuters has ⁠reported. TAPPING INFERENCE DEMAND A DeepSeek inference chip would target the fastest-growing segment of AI computing demand. As AI applications spread, more of the industry's computing work is shifting from training models to running them, which relies on specialised chips that can be cheaper and less power-hungry than general-purpose GPUs. However, there is no guarantee of success. Designing a competitive AI chip typically takes years and significant ⁠capital. Manufacturing poses another hurdle as the U.S. bans Chinese designers from accessing the most advanced overseas foundries, while separate U.S. curbs have cut China's access to high-bandwidth memory, a component critical to AI inference chips. DeepSeek's chip push coincides with the company's first embrace of outside capital. The company was slated to raise $7 billion in a maiden funding round valuing it at between $52 billion and $59 billion, Reuters reported in June, reversing its yearslong strategy of rejecting external investment. Reporting by Reuters staff; Editing by Eduardo Baptista and Tomasz Janowski Our Standards: The Thomson Reuters Trust Principles., opens new tab

Reuters: DeepSeek is developing its own AI chips - Engadget

It is reportedly hiring engineers and speaking to manufacturers. DeepSeek, the Chinese AI company which sometimes keeps tech executives awake at night, is reportedly looking to build its own silicon. Reuters' (via USNews) sources suggest DeepSeek is looking to build a chip for inference, which is the process of running a model that has already been trained and built. The move comes as part of a push to reduce its reliance on third-party chip providers like Huawei and NVIDIA. If the report is accurate, it could signal another entrant in the fiercely competitive Chinese AI market. The report suggests DeepSeek is already in talks with manufacturing partners and has quietly begun hiring engineers to support the effort. Of course, given the various import and export bans, we probably won't see any of DeepSeek's tech leaving China. But, given how the company made its name with an open-source model that could hold its own against the big names for a fraction of the cost, its interest in chip development should be taken seriously. Especially if it finds a way to create similar cost and power savings which would likely put another dent in NVIDIA's stock.

DeepSeek is reportedly designing its own AI chip to sidestep US curbs

A design is not a working chip, but a Chinese lab with the talent and the motive is said to be trying to build one. DeepSeek is designing its own artificial-intelligence chip, according to a Reuters report published on Monday that cited people familiar with the matter. The move, if it holds up, would push China's most closely watched AI lab from writing software that runs on other companies' silicon to specifying the silicon itself. The Hangzhou startup has spent the past year tuning its models for Huawei's Ascend processors and other domestic Chinese silicon, a departure from its earlier reliance on Nvidia hardware. A chip of its own design would extend that shift a further step, from adapting to Chinese hardware to defining it. The reported chip is meant for inference, the stage where a trained model answers user queries, rather than for training, the far more compute-hungry work of building the model in the first place. DeepSeek released its V4-Pro and V4-Flash models in April, a trillion-parameter line the company itself says trails the Western frontier by roughly three to six months. According to the Reuters account, the chip would be fabricated by Semiconductor Manufacturing International Corporation, China's largest foundry, rather than Taiwan's TSMC. SMIC has been cut off from the most advanced chipmaking tools by US and Dutch export controls, and is widely reported to be stuck on a 7-nanometre process several generations behind the leading edge. None of this has been confirmed by DeepSeek, which did not respond to Reuters' request for comment and has a long record of saying little in public. The lab, founded by Liang Wenfeng, has stayed unusually opaque even as its models have drawn global scrutiny, so the specifics here rest on anonymous sourcing rather than on the record. The strategic logic is plain enough. Washington restricts the sale of Nvidia's best chips to China and has weighed adding DeepSeek to its Entity List, so a home-grown inference part would trim the lab's exposure to hardware it may struggle to buy. Roughly 70 per cent of AI compute demand is now expected to come from inference rather than training, which is where a purpose-built chip would earn its keep and where Chinese silicon is already closest to competitive. There is precedent for the ambition. As far back as early 2025, trade press including Digitimes reported that DeepSeek was recruiting chip-design talent, and analysts have argued that any domestic processor would have little choice but to lean on SMIC. The obstacles are just as plain. Designing a competitive AI accelerator is a multi-year undertaking, and China's foundries cannot yet match the yields or the performance of TSMC's most advanced nodes, a gap the export controls are meant to preserve. On the most credible estimates, SMIC's AI-chip yields remain low, which limits how many usable parts a design of this kind could realistically produce. DeepSeek's own experience shows the limits. Its R2 model was repeatedly delayed after training runs failed on Huawei hardware, forcing the lab back onto Nvidia GPUs for training while reserving Chinese chips for inference, which is precisely the division of labour the new chip would reportedly serve. Money, at least, is no longer the constraint it once was. Chinese chipmakers rushed to support V4 on launch day, and state capital is flowing toward the lab, with the state-backed Big Fund reported to be leading a $45bn funding round. What comes next is a question of proof rather than intent. A design is not a working chip, a working chip is not a shipping product, and taped-out silicon can still fail on the test bench. Until DeepSeek confirms anything, the safest reading is a modest one: a lab with the engineers, the motive, and now the money appears to be trying to close the last remaining gap in a fully Chinese AI stack, from model down to chip. Whether it succeeds is a separate story, and one nobody can yet source.

Report: China's DeepSeek follows OpenAI in developing its own custom inference chips

Report: China's DeepSeek follows OpenAI in developing its own custom inference chips DeepSeek Ltd., one of China's most visible artificial intelligence companies, is pushing to design its own, in-house silicon aimed at inference workloads, according to a report by Reuters today. The report cites three people familiar with the company's plans as saying that it has been exploring the concept of developing its own AI accelerators for about a year, but the initiative is still at the early stages. So far, DeepSeek has contacted outside partners and held discussions with chip design, foundry and memory companies, while also trying to hire a number of experienced chip designers to join its engineering teams. The focus on inference chip is telling, because this is the stage where a trained model generates responses for users, and it's an important workload that AI companies must control if they want to be able to commercialize their most advanced models. While AI training is what made DeepSeek famous, inference is what becomes the recurring cost center that drives revenue once people start using those models. DeepSeek's goal seems to be to reduce its reliance on Nvidia Corp. and Huawei Technologies Co. Ltd., which until now have been its two primary suppliers of AI chips. When the company shot to fame in January 2025 with its low-cost yet high-performing R1 model triggering a rout in U.S. technology stocks, it said it had trained that system on Nvidia's H800 chips. That hardware was designed specifically for the Chinese market and had been throttled compared to what was being sold to U.S. firms, but it was later banned by the U.S. under President Donald Trump's administration. Since then, DeepSeek has leaned more heavily on Huawei's Ascend graphics processing units. In April it released its most advanced V4 model, which was designed to run on Huawei's chips, leading to a surge of sales of the Ascend 950 to Chinese technology firms after its launch. The U.S. ban on Nvidia chip exports to China has helped Huawei to become the dominant chip supplier in China, but Reuters' sources said DeepSeek doesn't want to become too reliant on that company. By seeking to develop its own, in-house AI processors, DeepSeek is also following the playbook of U.S. AI firms like OpenAI Group PBC and Anthropic PBC, which are also seeking greater control over the hardware that power its models. In OpenAI's case, it recently unveiled a new custom inference chip called Jalapeno that was co-designed with Broadcom Inc. While OpenAI says its primary concern is to reduce its reliance on Nvidia, it's believed that the company also has a desire to gain more control over the tech stack behind its products, similar to Apple Inc., which designs the chips for its iPhones and Mac laptops. Furthermore, designing its own silicon could provide it with an advantage at a time when access to data center compute resources is becoming increasingly constrained, Reuters reported. Developing AI chips is an extremely costly endeavor, but DeepSeek is believed to have plenty of money to throw at such an initiative after it recently raised $7.4 billion in funding from a host of Chinese investors last month. DeepSeek isn't alone in seeing the advantages of developing its own silicon, with Reuters reporting that rivals like Alibaba Group Holding Ltd. and Baidu Inc. are also working on their own AI processors.

Exclusive-China's DeepSeek Developing Its Own AI Chip, Sources Say

July 7 (Reuters) - Chinese startup DeepSeek is developing its own AI chip, according to three people familiar ⁠with ⁠the matter, a push that could reduce its reliance ⁠on Nvidia and Huawei chips, which it has depended on to train and run its globally popular models. The chip is designed for inference -- the stage of AI computing in which a trained model generates responses for users -- rather than for training new models, the sources said. If successful, DeepSeek's expansion into semiconductor development would mark a major strategic shift for a company widely hailed in China as the country's AI champion, potentially adding to challenges faced by Chinese tech giant Huawei. DeepSeek rose to global fame more than a year ago after releasing two highly efficient AI ⁠models that went viral ⁠worldwide, surprising many in Silicon Valley and Washington. The company has long been known for emphasizing AI model breakthroughs rather than commercializing its technology. Although Huawei's offerings still lag Nvidia's most advanced chips by a wide margin, a U.S. ban on their exports to China has helped Huawei gain around half of the $50 billion domestic AI chip market, supplying DeepSeek and several other leading industry players. However, Huawei's hold on the market is already weakening as tech rivals Alibaba and Baidu develop their own AI chips and gain market share. DeepSeek's effort to join that race remains at an early stage, with the company reaching out to external partners and holding discussions with chip-design, foundry and memory companies, ⁠the ⁠three sources said. The effort began about ⁠a year ago, one of the people said. The Hangzhou-based company has also increased hiring of chip-design engineers in recent months, but recruitment has been done privately without job postings on public hiring platforms, two of the sources said. All three people declined ⁠to be identified because the information is not public. Despite becoming a standard-bearer of China's AI ambitions, DeepSeek has kept a low profile. The company did not respond to a request for comment. FOLLOWING GLOBAL TRENDS With an in-house chip, DeepSeek would be joining other global AI developers in seeking greater control over the hardware behind their models and reduced dependence on Nvidia's. OpenAI last month unveiled Jalapeno, its first custom inference chip, developed with Broadcom, while Anthropic has been weighing building its own AI chips, Reuters reported in April. For DeepSeek, the effort carries an added strategic dimension. U.S. export ⁠controls bar Chinese companies from buying Nvidia's most advanced chips, and Beijing has been pressing its technology champions to build domestic alternatives. DeepSeek ⁠founder Liang Wenfeng said in a rare 2024 interview with a Chinese media outlet that chip export controls were a challenge for the company. DeepSeek has used both Nvidia and Huawei chips. The company has said the foundation model underpinning R1, the reasoning model whose low-cost performance triggered a rout in U.S. tech stocks in January 2025, was trained on Nvidia's H800, a chip designed for the Chinese market that Washington banned in late 2023. The company has since leaned increasingly on Huawei. In April it released its V4 model adapted for Huawei's Ascend chips, and Huawei said its processors were used in part of the training of V4-Flash, a lighter version of the model. Orders for Huawei's Ascend 950 chips from Chinese tech conglomerates surged after the launch, Reuters has reported. TAPPING INFERENCE DEMAND A DeepSeek inference chip would target the fastest-growing segment of AI computing demand. As AI applications spread, more of the industry's computing work is shifting from training models to running them, which ⁠relies on specialised chips that can be cheaper and less power-hungry than general-purpose GPUs. However, there is no guarantee of success. Designing a competitive AI chip typically takes years and significant capital. Manufacturing poses another hurdle as the U.S. bans Chinese designers from accessing the most advanced overseas foundries, while separate U.S. curbs have cut China's access to high-bandwidth memory, a component critical to AI inference chips. DeepSeek's chip push coincides with the company's first embrace of outside capital. The company was slated to raise $7 billion in a maiden funding round valuing it at between $52 billion and $59 billion, Reuters reported in June, reversing its yearslong strategy of rejecting external investment. (Reporting by Reuters staff; Editing by Eduardo Baptista and Tomasz Janowski)

China's DeepSeek developing its own AI chip

The chip is designed for inference - the stage of AI computing in which a trained model generates responses for users - rather than for training new models, sources said. Chinese startup DeepSeek is developing its own AI chip, according to three people familiar with the matter, a push that could reduce its reliance on Nvidia and Huawei chips, which it has depended on to train and run its globally popular models. The chip is designed for inference - the stage of AI computing in which a trained model generates responses for users - rather than for training new models, the sources said. If successful, DeepSeek's expansion into semiconductor development would mark a major strategic shift for a company widely hailed in China as the country's AI champion, potentially adding to challenges faced by Chinese tech giant Huawei. DeepSeek rose to global fame more than a year ago after releasing two highly efficient AI models that went viral ⁠worldwide, surprising ⁠many in Silicon Valley and Washington. The company has long been known for emphasizing AI model breakthroughs rather than commercializing its technology. Although Huawei's offerings still lag Nvidia's most advanced chips by a wide margin, a U.S. ban on their exports to China has helped Huawei gain around half of the $50 billion domestic AI chip market, supplying DeepSeek and several other leading industry players. However, Huawei's hold on the market is already weakening as tech rivals Alibaba and Baidu develop their own AI chips and gain market share. DeepSeek's effort to join that race remains at an early stage, with the company reaching out to external partners and holding discussions with chip-design, foundry and memory companies, the three sources said. The effort began about a year ago, one of the people said. The Hangzhou-based company has also increased hiring of ⁠chip-design engineers in recent months, but recruitment has been done privately without job postings on public hiring platforms, two of the sources said. All three people declined to be identified because the information is not public. Despite becoming a standard-bearer of China's AI ambitions, DeepSeek has kept a low ⁠profile. The company did not respond to a request for comment. Following global trends With an in-house chip, DeepSeek would be joining other global AI developers in seeking greater control over the hardware behind their models and reduced dependence on Nvidia's. OpenAI last month unveiled Jalapeno, its first custom inference chip, developed with Broadcom, while Anthropic has been weighing building its own AI chips, Reuters reported in April. For DeepSeek, the effort carries an added strategic dimension. U.S. export controls bar Chinese companies from buying Nvidia's most advanced chips, and Beijing has been pressing its technology champions to build domestic alternatives. DeepSeek founder Liang Wenfeng said in a rare 2024 interview with a Chinese media outlet that chip export controls were a challenge for the company. DeepSeek has used both Nvidia and Huawei chips. The company has said the foundation model underpinning R1, the reasoning model whose low-cost performance triggered a rout in U.S. tech stocks in January 2025, was trained on Nvidia's H800, a chip designed for the Chinese market that Washington banned in late 2023. The company has since leaned increasingly on Huawei. In April it released its V4 model adapted for Huawei's Ascend chips, and Huawei said its processors were used in part ⁠of the training of V4-Flash, a lighter version of the model. Orders for Huawei's Ascend 950 chips from Chinese tech conglomerates surged after the launch, Reuters has reported. Tapping inference demand A DeepSeek inference chip would target the fastest-growing segment of AI computing demand. As AI applications spread, more of the industry's computing work is shifting from training models to running them, which relies on specialised chips that can be cheaper and less power-hungry than general-purpose GPUs. However, there is no guarantee of success. Designing a competitive AI chip typically takes years and significant capital. Manufacturing poses another hurdle as the U.S. bans Chinese designers from accessing the most advanced overseas foundries, while separate U.S. curbs have cut China's access to high-bandwidth memory, a component critical to AI inference chips. DeepSeek's chip push coincides with the company's first embrace of outside capital. The company was slated to raise $7 billion in a maiden funding round valuing it at between $52 billion and $59 billion, Reuters reported in June, reversing its yearslong strategy of rejecting external investment.

DeepSeek Is Reportedly Building Its Own Inference Chip to Break Free From Both NVIDIA and Huawei

China's premier AI firm, DeepSeek, is reportedly working on its own AI chip, which will primarily be an inference accelerator. Step Aside NVIDIA & Huawei, China's DeepSeek Prepares Its Own AI Inference Chip DeepSeek, the leading AI firm which is based in China, has started developing its own AI chip. As per Reuters, multiple people have stated that the firm is now developing what could be the end of reliance on NVIDIA and Huawei. We already know that China is focusing more on domestic solutions for AI. The country is banning the use of NVIDIA-based accelerators from being used, but despite rigorous restrictions, Chinese firms still rely heavily on NVIDIA GPUs and are also importing them through illegal means. Chinese startup DeepSeek is developing its own AI chip, according to three people familiar with the matter, a push that could reduce its reliance on Nvidia and Huawei chips, which it has depended on to train and run its globally popular models. via Reuters Meanwhile, Huawei, China's crown jewel for chip development, has already shared its next-gen roadmap and is supplying domestic AI firms with the latest and greatest. DeepSeek has largely relied on the two (NVIDIA & Huawei) for training its AI models, but that is about to change as the company is now focused on developing an in-house chip that will be an inference accelerator. As per Richard Windsor, Analyst of Radio Free Mobile, the development of DeepSeek's in-house inference chip will pose no serious threat to NVIDIA as the company will be unable to attract any major customers outside of China. That is in the case DeepSeek is at first successful in making the chip. Just like global AI firms, Chinese AI firms such as Alibaba, Baidu, and now DeepSeek, have started development of their own in-house chips that are catered towards their latest AI models & work-loads. In parallel, NVIDIA's Vera CPUs are said to be adopted by Chinese firms since there's no ban on CPUs, but GPUs, which are largely used as AI accelerators, are primarily banned. China only has access to NVIDIA's H200 and the cut-down H20 chip. And the latest Blackwell GPUs are entirely banned, leading many to smuggle them from bordering countries. DeepSeek recently launched its latest V4 models, for which NVIDIA is offering out-of-the-box support on its latest Blackwell GPUs. Meanwhile, DeepSeek V4 was trained on Huawei's Ascend 950DT AI accelerator, fully supporting the 1.6T heavyweight model. Looking ahead, DeepSeek making its own chip shows a fundamental shift in the strategy of major AI players. Custom silicon is rapidly becoming the leading choice for many AI firms, which poses a serious threat to chipmakers such as NVIDIA, Huawei, and the rest. Follow Wccftech on Google to get more of our news coverage in your feeds.

DeepSeeks Looks To Sidestep Huawei As It Begins In-House AI Chip Journey While Dodging Development Complications, Trade Sanctions, Delays & More

AI chips from Huawei and NVIDIA are currently being leveraged to train and run DeepSeek's popular models, but the days of this arrangement could be numbered as the Chinese startup has plans in motion to launch its in-house inference silicon. According to people familiar with the firm's plans, the chip won't be utilized for training new models, but for generating responses for users on a pre-trained one. Of course, the journey will be arduous because not only does it take years to launch a viable solution, but DeepSeek also has to contend with being limited to existing chip manufacturing equipment due to U.S. sanctions, not to mention the costs of developing a custom solution from scratch. In short, success is far from guaranteed. Huawei has managed to carve out a massive market in China, with DeepSeek one of its customers, but the latter seeks greater control over the hardware Chinese companies like Alibaba and Baidu are already weakening Huawei's grip on the AI chip market as they have commenced the journey to design and mass producing their own in-house silicon. Reuters reports that DeepSeek aims to reduce its reliance on NVIDIA and Huawei, obtaining more control over its hardware. While the plan is in its early stages, DeepSeek has already begun hiring talented chip design engineers in recent months for the same reason. However, the report mentions that to keep a low profile, these hirings were performed privately rather than posted on public platforms. As much as DeepSeek should be commended on carving its own path, its progress will be mired by a truckload of obstacles. For instance, an in-house AI chip takes years and billions in incurred costs, particularly during the tape-out process. Most importantly, DeepSeek will be limited to relying on SMIC's older and inefficient 7nm process for mass producing the unnamed AI chip, meaning that the latter will be technologically inferior to NVIDIA's solutions that use TSMC's latest and greatest manufacturing processes. Sourcing Dutch firm ASML's advanced EUV machines is out of the question for DeepSeek, as a Chinese entity would immediately qualify for the U.S. trade sanctions list. To tackle mounting costs, DeepSeek was previously reported to have raised $7 billion in a funding round that took its valuation to between $52-$59 billion, contrary to its earlier strategy of rejecting external investment. News Source: Reuters Follow Wccftech on Google to get more of our news coverage in your feeds.

China's DeepSeek developing its own AI chip, sources say - The Korea Times

Chinese startup DeepSeek is developing its own AI chip, according to three people familiar with the matter, a push that could reduce its reliance on Nvidia and Huawei chips, which it has depended on to train and run its globally popular models. The chip is designed for inference -- the stage of AI computing in which a trained model generates responses for users -- rather than for training new models, the sources said. If successful, DeepSeek's expansion into semiconductor development would mark a major strategic shift for a company widely hailed in China as the country's AI champion, potentially adding to challenges faced by Chinese tech giant Huawei. Shares of U.S.-based Nvidia slipped about 2 percent in premarket trading. DeepSeek rose to global fame more than a year ago after releasing two highly efficient AI models that went viral worldwide, surprising many in Silicon Valley and Washington. The company has long been known for emphasizing AI model breakthroughs rather than commercializing its technology. Although Huawei's offerings still lag Nvidia's most advanced chips by a wide margin, a U.S. ban on their exports to China has helped Huawei gain around half of the $50 billion domestic AI chip market, supplying DeepSeek and several other leading industry players. However, Huawei's hold on the market is already weakening as tech rivals Alibaba and Baidu develop their own AI chips and gain market share. DeepSeek's effort to join that race remains at an early stage, with the company reaching out to external partners and holding discussions with chip-design, foundry and memory companies, the three sources said. The effort began about a year ago, one of the people said. The Hangzhou-based company has also increased hiring of chip-design engineers in recent months, but recruitment has been done privately without job postings on public hiring platforms, two of the sources said. All three people declined to be identified because the information is not public. Despite becoming a standard-bearer of China's AI ambitions, DeepSeek has kept a low profile. The company did not respond to a request for comment. Following global trends With an in-house chip, DeepSeek would be joining other global AI developers in seeking greater control over the hardware behind their models and reduced dependence on Nvidia's. OpenAI last month unveiled Jalapeno, its first custom inference chip, developed with Broadcom, while Anthropic has been weighing building its own AI chips, Reuters reported in April. For DeepSeek, the effort carries an added strategic dimension. U.S. export controls bar Chinese companies from buying Nvidia's most advanced chips, and Beijing has been pressing its technology champions to build domestic alternatives. DeepSeek founder Liang Wenfeng said in a rare 2024 interview with a Chinese media outlet that chip export controls were a challenge for the company. DeepSeek has used both Nvidia and Huawei chips. The company has said the foundation model underpinning R1, the reasoning model whose low-cost performance triggered a rout in U.S. tech stocks in January 2025, was trained on Nvidia's H800, a chip designed for the Chinese market that Washington banned in late 2023. The company has since leaned increasingly on Huawei. In April it released its V4 model adapted for Huawei's Ascend chips, and Huawei said its processors were used in part of the training of V4-Flash, a lighter version of the model. Orders for Huawei's Ascend 950 chips from Chinese tech conglomerates surged after the launch, Reuters has reported. Tapping inference demand A DeepSeek inference chip would target the fastest-growing segment of AI computing demand. As AI applications spread, more of the industry's computing work is shifting from training models to running them, which relies on specialised chips that can be cheaper and less power-hungry than general-purpose GPUs. However, there is no guarantee of success. Designing a competitive AI chip typically takes years and significant capital. Manufacturing poses another hurdle as the U.S. bans Chinese designers from accessing the most advanced overseas foundries, while separate U.S. curbs have cut China's access to high-bandwidth memory, a component critical to AI inference chips. DeepSeek's chip push coincides with the company's first embrace of outside capital. The company was slated to raise $7 billion in a maiden funding round valuing it at between $52 billion and $59 billion, Reuters reported in June, reversing its yearslong strategy of rejecting external investment.

DeepSeek is now reportedly designing its own chip: a bid to cut Nvidia reliance

Reuters says it's targeting inference as export controls tighten DeepSeek, the Chinese AI startup, is reportedly working on its own inference chip, the part that spits out answers when you ask a model something, Reuters reports. If that holds, it's a real change in direction: less dependence on Nvidia, and to a lesser degree, on Huawei hardware too. Reuters says DeepSeek is aiming at inference, not training. That tracks. Serving chatbot responses at scale burns through money fast, and a custom chip could give the company tighter control over cost, performance, and how those systems are deployed across the whole stack. That push toward self-reliance looks even more urgent now that Washington has tightened export controls. Reuters says DeepSeek had been using Nvidia's China-specific H800 chips before those also got caught by additional U.S. restrictions, which makes access to top-end compute a lot less predictable for Chinese AI companies. If you pay attention to AI infrastructure, this is one to keep an eye on. Still, it's early. Reuters says DeepSeek is in talks with chip designers, foundries, and memory suppliers, while also quietly hiring engineers. Even so, a processor that can really compete would take years, a lot of money, advanced manufacturing capacity, and high-bandwidth memory, all of which are still vulnerable to bottlenecks and export limits. Per Reuters, DeepSeek would be joining a broader push that's already underway, one that includes major AI companies and Chinese players like Alibaba, Baidu, and Huawei. For now, this looks like a long-term bet on survival, independence, and control, not a product launch that's right around the corner.