NVIDIA has responded to serious allegations concerning a Chinese AI rival. Reports suggest startup DeepSeek is using smuggled advanced chips. The chips in question, Nvidia’s cutting-edge Blackwell GPUs, are banned for direct sale to China by US regulations.
Reports allege that DeepSeek uses illicit, backdoor supply channels. This would allow them to train advanced AI models despite the embargo. An Nvidia spokesperson addressed the allegations directly. “We haven’t seen any substantiation or received tips of ‘phantom data centres’,” the spokesperson stated.
The company acknowledged the seriousness of any smuggling claims. However, it noted a lack of concrete evidence so far. NVIDIA’s graphics processing units are essential for modern AI development. They train large language models and manage immense computational workloads.
Did Chinese AI startup DeepSeek use smuggled Nvidia Blackwell chips to train its new model? A new report says yes, raising questions about the efficacy of US export controls. pic.twitter.com/eklI9375im
— TaiwanPlus News (@taiwanplusnews) December 11, 2025This global dependence makes Nvidia’s relationship with China highly contentious. US lawmakers have repeatedly scrutinised deals with Chinese firms. In a surprising policy shift, President Donald Trump recently lifted a key ban, allowing Nvidia to ship its H200 AI chips to “approved customers” in China.
Read: Chinese Open-Source AI Models Capture 30% of Global Use
The new condition requires the US to receive 25% of sales revenue. This reversal has drawn criticism from some Republican lawmakers. Despite this change, the more advanced Blackwell chips remain restricted.
*DEEPSEEK REPORTEDLY USING SMUGGLED NVIDIA BLACKWELL CHIPS FOR AI MODEL DEVELOPMENT$NVDA 🇨🇳🇨🇳https://t.co/UZJGeSbUru
— Investing.com (@Investingcom) December 10, 2025DeepSeek emerged as a major AI contender in January 2025. Its “R1” reasoning model quickly rose to the top of global app store rankings. Notably, the company developed the model at a lower cost than comparable US projects. The firm has also announced plans for greater self-sufficiency.
DeepSeek aims to produce its own next-generation AI chips domestically. This strategy seeks to reduce long-term dependence on foreign semiconductor technology. The situation highlights the intense technological competition and complex trade dynamics in the global AI race.
