The US Commerce Department is reportedly investigating whether Chinese AI company DeepSeek has used restricted American-made chips, according to Bloomberg and Reuters, citing sources familiar with the matter.
Current rules prevent advanced AI processors, including those from Nvidia Corp (NASDAQ:NVDA, ETR:NVD), from being shipped to China.
DeepSeek recently launched an AI assistant that operates with lower costs and data usage than US models.
The app quickly became the most downloaded on Apple’s App Store, triggering concerns about US dominance in AI and contributing to a $1 trillion drop in technology stocks.
DeepSeek has confirmed using Nvidia’s H800 chips, which were legally available in 2023 and reportedly possesses H20 chips, which can still be sold to China. However, concerns remain that some AI chips may have been smuggled through third countries, including Singapore and the UAE.