DeepSeek, the Chinese AI startup that stunned Silicon Valley earlier this year with its ultra-cheap, high-performing chatbot, is reportedly training its next model on thousands of Nvidia $NVDA ( ▲ 3.74% ) Blackwell GPUs - chips that the US still prohibits from being sold to China. The Information cites six people familiar with the operation, describing a pipeline where entire servers are shipped, dismantled, and quietly funneled into China piece by piece.
The timing is striking. The Trump administration just approved exports of Nvidia’s H200 chips into China, but Blackwell remains firmly off-limits. Even so, DeepSeek appears to have secured enough banned hardware to build the successor to the V3 model that shook the industry in early 2025.
DeepSeek previously claimed the V3 was trained only on Nvidia’s H800 chips, but skeptics across the AI world long suspected they had access to more powerful compute. The White House and FBI reportedly launched investigations earlier this year into potential chip smuggling tied to the model’s unexpectedly strong performance.
Those suspicions grew after Singapore charged several individuals with fraud for routing servers equipped with high-end Nvidia GPUs through Malaysia, with their final destination presumed to be China.
The revelations raise a bigger question for US policymakers: even with bans in place, can Washington actually stop China’s top labs from getting the world’s best chips?