A senior official from the Trump administration says the Chinese AI startup DeepSeek used Nvidia’s most powerful chips to build its latest model. This action would represent a significant violation of U.S. export controls. The official claims DeepSeek likely utilized the advanced Blackwell chips at a data center in Inner Mongolia and plans to remove technical indicators to hide the evidence.
The U.S. government currently bans the export of Blackwell chips to China to prevent the country from using American technology to advance its military capabilities. The official emphasized that the U.S. policy is clear: “we’re not shipping Blackwells to China.” While the official declined to explain how the government obtained this information or how DeepSeek acquired the hardware, the report confirms fears that strict sanctions are not fully stopping high-end tech from crossing borders.
Neither Nvidia nor DeepSeek responded to requests for comment. However, the Chinese embassy in Washington criticized the U.S. for politicizing trade issues and “overstretching the concept of national security.” DeepSeek, based in Hangzhou, previously shocked global markets by releasing AI models that rivaled top American competitors, fueling anxiety in Washington that China is catching up in the AI race despite trade restrictions.
This revelation intensifies a debate within the U.S. government regarding how to handle tech exports. Some voices, including Nvidia CEO Jensen Huang, argue that selling chips to China discourages them from developing their own domestic alternatives like Huawei. However, national security hawks argue this incident proves that Chinese companies will ignore rules and use American chips to threaten U.S. dominance.
The official also suggested DeepSeek used a technique called “distillation” to build its model. This involves using established American AI models from companies like OpenAI or Google to teach and evaluate their own system, effectively transferring knowledge from U.S. tech to Chinese software. This confirms earlier reports of smuggling but marks the first time the government has verified the chips were used specifically to train DeepSeek’s upcoming model.
