Chinese artificial intelligence startup DeepSeek is preparing to launch its latest AI model as early as next week. However, a senior official from the administration of U.S. President Donald Trump said the model was trained using Nvidia’s most advanced AI processor, the Blackwell chip — a move that could breach current U.S. export controls on advanced semiconductors.
According to the official, U.S. authorities believe DeepSeek may attempt to remove technical markers that could reveal the use of American AI hardware. The Blackwell chips are thought to be concentrated at the company’s data centre in Inner Mongolia, an autonomous region of China. The official did not disclose how Washington obtained this intelligence or how DeepSeek allegedly acquired the chips, but stressed that U.S. policy remains clear: Blackwell processors are not authorised for export to China.
Nvidia declined to comment on the matter, while the U.S. Commerce Department and DeepSeek did not respond to media inquiries. Meanwhile, the Chinese embassy in Washington criticised what it described as the politicisation of trade and technology issues, opposing what it called an expansive use of export controls under the banner of national security.
At a regular briefing, Chinese foreign ministry spokesperson Mao Ning said she was unaware of the specific circumstances but reiterated Beijing’s longstanding position regarding U.S. chip export restrictions.
Washington Divided Over China’s Access to Advanced AI Chips
The reported confirmation that DeepSeek obtained Nvidia’s Blackwell chips — first revealed by Reuters — may deepen divisions within U.S. policymaking circles. Officials continue to debate how far restrictions on China’s access to advanced AI semiconductors should go.
White House AI adviser David Sacks and Nvidia CEO Jensen Huang have argued that allowing certain advanced chip sales to China could prevent domestic competitors such as Huawei from accelerating efforts to close the technology gap with Nvidia and AMD.
However, more hawkish policymakers warn that even commercially intended AI chips could be redirected to strengthen China’s military capabilities, potentially challenging U.S. leadership in artificial intelligence.
Chris McGuire, a former National Security Council official under President Joe Biden, said the situation highlights the risks of exporting advanced AI technology to China. He argued that if leading Chinese AI firms are bypassing export controls, there is little reason to expect compliance with safeguards intended to prevent military applications.
Export Controls and the Blackwell Debate
U.S. export controls, administered by the Commerce Department, currently prohibit shipments of Nvidia’s Blackwell chips to China. In August, President Trump signalled openness to allowing Nvidia to sell a modified, lower-performance version of the Blackwell chip in China. He later reversed that stance, stating that the most advanced AI processors should remain reserved for U.S. companies.
In December, the administration approved limited sales of Nvidia’s second-most advanced chip, the H200, to Chinese firms. The decision faced criticism from lawmakers concerned about national security, and deliveries remain delayed due to additional safeguards attached to the approvals.
Saif Khan, a former White House official overseeing technology and national security, said Chinese firms’ alleged reliance on smuggled Blackwell chips reflects a significant shortfall in domestically produced AI semiconductors. He suggested that access to H200 chips could provide crucial support to China’s AI sector.
The administration has not clarified whether the latest developments will affect decisions regarding potential H200 sales to DeepSeek.
AI Model Training and Distillation Concerns
The official also indicated that DeepSeek’s new model may have relied on a training technique known as “distillation.” This process involves using an established, high-performing AI model to evaluate and refine the outputs of a newer system, effectively transferring knowledge.
Leading U.S. AI companies, including Anthropic, Google, OpenAI and xAI, have previously raised concerns that their models may have been used in such a way without authorisation.
Based in Hangzhou, DeepSeek drew global attention last year after unveiling AI models that rivalled top U.S. systems. The development intensified concerns in Washington that China could narrow the artificial intelligence gap despite ongoing semiconductor export restrictions.
Previous reports suggested that advanced chips were smuggled into China for DeepSeek’s next-generation model. Reuters has now reported that U.S. officials have confirmed the alleged use of Blackwell processors at DeepSeek’s Inner Mongolia facility.
