Chinese AI startup may have accessed banned Blackwell processors, raising fresh questions over export control enforcement and the intensifying US–China AI race
Chinese AI startup DeepSeek trained its latest artificial intelligence model using Nvidia’s most advanced chip, Blackwell, despite strict American export controls barring shipments of the processor to China, Reuters reported on Tuesday, citing a senior Trump administration official.
The Hangzhou-based company’s upcoming model, expected as soon as next week, was trained on Nvidia’s Blackwell chips, which are currently prohibited from being exported to China under rules overseen by the US Commerce Department, the report said.
If confirmed, the development would represent a potential violation of US export controls and is likely to deepen divisions within Washington over how aggressively to restrict China’s access to cutting-edge AI hardware.
Chips likely clustered in Inner Mongolia
According to the report, the US government believes the Blackwell chips are concentrated at DeepSeek’s data centre in Inner Mongolia. The report did not disclose how US authorities obtained the intelligence or how DeepSeek secured the chips, but stressed that US policy remains clear: “We’re not shipping Blackwells to China.”
The report also said that DeepSeek could attempt to strip away technical markers that would reveal the use of American-origin chips in training its model.
In a statement to Reuters, the Chinese embassy in Washington criticised what it described as the “overstretching” of national security concepts and the politicisation of trade and technology issues, reiterating Beijing’s opposition to expansive export controls.
Policy rift widens in Washington
The development comes at a sensitive time in US policymaking circles, where officials remain split over how tightly to restrict AI chip flows to China.
David Sacks and Nvidia chief executive Jensen Huang have argued that allowing some advanced chip sales to China could temper the rise of domestic rivals such as Huawei by keeping Chinese firms reliant on American technology.
But China hawks counter that even commercially supplied chips can be diverted for military use, accelerating Beijing’s AI capabilities and eroding US technological dominance.
“This shows why exporting any AI chips to China is so dangerous,” Chris McGuire, a former National Security Council official under president Joe Biden, told Reuters. “Given China’s leading AI companies are brazenly violating US export controls, we obviously cannot expect that they will comply with US conditions that would prohibit them from using chips to support the Chinese military.”
Saif Khan, who also served at the National Security Council under Biden, told Reuters Chinese firms’ reliance on allegedly smuggled Blackwells underscores the shortfall in domestically produced AI chips and argued that approving sales of Nvidia’s H200 chips would offer Beijing a “lifeline”.
Trump’s shifting stance on AI exports
US export controls currently bar shipments of Blackwell processors to China. In August, President Donald Trump signalled openness to Nvidia selling a scaled-down Blackwell variant to Chinese customers, but later reversed course, indicating that the most advanced AI chips should be reserved for US companies.
In December, however, the administration allowed Chinese firms to purchase Nvidia’s second-most advanced chips, known as the H200. That decision drew criticism from China hawks, and shipments remain stalled amid guardrails built into the approvals.
The senior official declined to comment on whether the latest revelations about DeepSeek would affect the administration’s deliberations over future H200 sales.
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