DeepSeek uses banned Nvidia chips for AI model, report says (finance.yahoo.com)

Chinese startup DeepSeek has reportedly utilized Nvidia's blacklisted Blackwell chips, smuggled into the country through third-party nations, to advance its AI model development. The chips were sourced from data centers abroad, dismantled, and illegally shipped to China, circumventing US restrictions on exporting sophisticated semiconductors to the nation. This method highlights the lengths to which AI developers in China are going to secure advanced hardware, further intensifying the ongoing US-China technological rivalry. The significance of this situation lies in its implications for global AI competitiveness, as DeepSeek aims to challenge established players in Silicon Valley by leveraging these banned resources. The startup garnered attention for releasing an AI model competitive with top-tier offerings at a lower cost, thanks in part to its prior acquisition of thousands of Nvidia GPUs before the export bans took effect. While Nvidia maintains that it has seen no evidence supporting the smuggling claims, the incident underscores the challenges posed by regulatory measures and the ongoing push from the Chinese government for domestic tech self-sufficiency.