The US Commerce Department is reportedly investigating whether DeepSeekthe Chinese AI company whose model has made headlines, has been using restricted US-made AI chipsaccording to a source familiar with the matter.
DeepSeek launched a free AI assistant last weekclaiming it operates with significantly lower data and costs compared to US models. The app quickly became the most downloaded on Apple’s App Store. The rapid rise of DeepSeek’s model sparked concerns over the US’s AI dominanceleading to a $1 trillion market wipeout in US tech stocks.
US AI chip restrictions primarily target Nvidia’s most advanced processorspreventing their shipment to China.
Potential Smuggling Routes:
Nvidia’s Response:
DeepSeek previously used Nvidia H800 chipswhich it could legally purchase in 2023 before updated restrictions. The company also reportedly possesses Nvidia H20 chipswhich are still legally allowed for shipment to China. Unconfirmed reports suggest that DeepSeek may have accessed other restricted AI chipspossibly through smuggling or loopholes in US trade regulations.
Industry Reaction:
Chips not yet banned but should be Chips shipped before the ban Chips that appear to have been smuggled
The US is expanding its AI chip export restrictions beyond China, aiming to limit shipments to several other nations. The Biden administration and incoming Trump officials are discussing tighter controls on AI hardware like Nvidia H20s.
The US Commerce Department is actively investigating DeepSeekbut neither the agency nor the company has provided an official response. If violations are confirmedthe US could enforce stricter penalties and regulatory measuresfurther escalating tech tensions between the US and China.
What do you think about the ongoing AI chip war? Let us know in the comments! 
