Nvidia Rejects Claims That China’s DeepSeek Is Using Smuggled AI Chips
Nvidia has denied allegations that Chinese AI startup DeepSeek is secretly using restricted Nvidia Blackwell chips to train its next-generation models. The claims emerged after DeepSeek’s low-cost AI breakthrough shook global markets earlier in 2025, intensifying scrutiny over how China may be advancing its AI capabilities despite U.S. export controls.
Nvidia has pushed back against reports suggesting that Chinese artificial intelligence firm DeepSeek is relying on banned Nvidia hardware to power its rapid AI development. The controversy follows a report by The Information, which alleged that DeepSeek obtained smuggled Blackwell GPUs—Nvidia’s most advanced AI processors—to train an upcoming model.
The Blackwell chips are currently prohibited from export to China under U.S. trade restrictions designed to preserve America’s competitive edge in artificial intelligence. According to the report, the chips were allegedly moved through covert channels, involving so-called “phantom data centers” that masked their final destination.
Nvidia has firmly denied these claims. Speaking to CNBC, a company spokesperson said there is no evidence to support allegations of large-scale chip smuggling or deceptive infrastructure practices. The spokesperson added that Nvidia has not received verified tips or proof of data centers being built, dismantled, and reconstructed elsewhere to evade export controls, though the company said it investigates any credible leads it receives.
The U.S. government has banned the sale of Nvidia’s Blackwell processors to China as part of a broader strategy to limit Beijing’s access to cutting-edge AI technology. These chips represent Nvidia’s most powerful offering for training large-scale AI models.
DeepSeek rose to global prominence in January 2025 after releasing its R1 AI model, which reportedly achieved performance comparable to leading U.S. systems at a fraction of the cost. The announcement triggered anxiety across global markets, contributing to a sell-off that erased billions of dollars from U.S. tech stocks as investors reassessed China’s pace of AI advancement.
Further concerns emerged later in the year when DeepSeek suggested that China could soon develop its own next-generation AI chips, fueling speculation about how the country might bypass existing U.S. technology restrictions.
As competition in the global AI race intensifies, the dispute highlights growing tensions between innovation, regulation, and geopolitics—along with mounting scrutiny over how advanced AI hardware is sourced and deployed worldwide.
