According to senior US administration officials, the Chinese startup DeepSeek has managed to train its latest AI model using Nvidia‘s most advanced hardware, the Blackwell chip, despite current bans. These specific chips fall under strict US export controls that explicitly prohibit their shipment to China. This comes on top of Anthropic alleging that DeepSeek and other Chinese AI firms “stole” Claude’s AI processing capabilities.
DeepSeek bypassed export controls with Blackwell chips, US officials claim
According to Reuters, suggest that DeepSeek is operating these restricted chips within a data center located in Inner Mongolia. To avoid detection, the company might be removing technical indicators that would normally reveal the use of American silicon. It remains a mystery how the startup obtained the hardware. However, the news already forced Washington policymakers to reconsider the effectiveness of current trade barriers.
The discovery of Blackwell chips in China has intensified the debate among U.S. officials. Some, including White House AI advisors and Nvidia’s own leadership, argue that blocking all advanced exports might actually backfire. Their theory suggests that total restrictions push Chinese competitors like Huawei to work even harder to develop their own alternative technology.
On the other side of the fence, national security hawks view this as a major red flag. They worry that these powerful chips could be diverted from commercial AI projects to supercharge military capabilities. For these critics, the DeepSeek incident proves that leading Chinese firms may not comply with international trade conditions. It basically makes any AI chip export a potential risk.
More than just illegal hardware use and export
The controversy doesn’t stop at the physical chips. Officials also believe DeepSeek used a technique called “distillation” to give its new model a competitive edge. This process allows a newer AI to learn directly from the outputs of established industry leaders like OpenAI, Google, and Anthropic. By combining the raw power of smuggled Blackwell chips with the “borrowed” knowledge of American models, DeepSeek could be closing the gap faster than anyone anticipated.
Currently, DeepSeek is preparing to release this new model as early as next week. On the other hand, the AI industry is watching closely. If a startup can bypass global sanctions to build world-class AI, the current rules of the game might be due for a major overhaul. For now, the “crown jewels” of American tech seem to have found their way across the border, regardless of the bans in place.
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