fbpx

DeepSeek, a Chinese AI firm, has ignited intense speculation over the chips used to train its models. The key question: Did DeepSeek stay within legal boundaries, or did it acquire restricted Nvidia chips through unofficial channels? 

This debate is about more than just hardware; it has geopolitical implications and raises questions about the effectiveness of U.S. export controls in shaping the AI race. This article breaks down the news and social conversation about: 

  • What chips DeepSeek actually used 
  • The U.S. response and potential fallout 
  • How this incident challenges assumptions about AI hardware needs 

To understand how this debate has unfolded, it’s helpful to look at the key moments that shaped the discussion. The timeline below is drawn from both traditional news media coverage and widely shared social media discussions, offering a comprehensive view of how speculation over DeepSeek’s chip usage escalated, ultimately triggering market turbulence and government scrutiny. 

AI Chips Timeline

What Chips Did DeepSeek Use?

Official Claim: Nvidia H800 & Huawei Chips

DeepSeek maintains that it trained its V3 model using 2,048 Nvidia H800 chips—a version specifically designed for sale in China under U.S. trade restrictions. 

“In a research paper released last month, DeepSeek said it had trained its V3 model using just 2,048 of Nvidia’s H800 chips.” (Yahoo! Finance, Feb 1, 2025) 

There are also reports that DeepSeek is transitioning to Huawei’s Ascend 910C chip, further reducing reliance on Nvidia. 

“DeepSeek’s AI model reportedly runs inference workloads on Huawei’s newest Ascend 910C chips, showing how China’s AI industry has evolved over the past few months.” (X, @wccftech, Jan 28, 2025)   

The Counterclaim: Smuggled Nvidia H100 Chips?

Other reports claim DeepSeek acquired restricted Nvidia H100 chips via intermediaries in Singapore, Malaysia, and the UAE. 

“The U.S. government is investigating whether the Chinese artificial intelligence (AI) company DeepSeek has been using U.S. chips that are barred from being shipped to China, including from third parties in Singapore.” (The Diplomat, Feb 3, 2025) 

Some social media posts even claim DeepSeek has 50,000 Nvidia H100s, a number that would be impossible without unauthorized purchases. 

“Elon Musk says, DeepSeek ‘obviously’ has ~50,000 Nvidia H100 chips that they can’t talk about due to US export controls.” (X, @OpenSourceZone, Jan 27, 2025) 

Alternative Theory: Hoarded Nvidia Chips?

Another theory suggests DeepSeek built its breakthrough model by stockpiling thousands of Nvidia chips before sanctions tightened. If true, this could indicate a strategic move by DeepSeek to circumvent restrictions without resorting to illicit channels. 

“DeepSeek’s breakthrough ‘is either truly disruptive or deceptive, relying on hoarded Nvidia chips before the export sanctions.’” (The Jerusalem Post, Feb 1, 2025) 

The Geopolitical Angle

The U.S. Perspective: A Regulatory Failure?

The U.S. Commerce Department and lawmakers see DeepSeek as a challenge to existing export controls. 

“The development of DeepSeek’s new model despite U.S. export controls doesn’t mean the controls themselves are ineffective, as some have argued, but does mean that the U.S. should more frequently update them.” (MSN, Jan 30, 2025) 

Nvidia, for its part, denies wrongdoing: 

“We insist that our partners comply with all applicable laws, and if we receive any information to the contrary, act accordingly.” (The Globe and Mail, Jan 31, 2025) 

China’s AI Playbook: Innovation Under Sanctions

Some analysts argue that sanctions have historically driven innovation in new directions rather than halting it. 

“DeepSeek is far from the first Chinese firm forced to innovate in this way: Huawei has roared back into profit in recent years after reorienting its business to address U.S. sanctions.” (Tech Xplore, Jan 29, 2025) 

Some analysts question whether U.S. restrictions are having the intended effect, or if they may be driving efficiency improvements in China’s AI sector. 

“The constraints on China’s access to chips forced the DeepSeek team to train more efficient models that could still be competitive without huge compute training costs.” (Tech Xplore, Jan 29, 2025) 

Media & Social Framing

To better understand how the DeepSeek controversy has been discussed in both traditional media and social platforms, the following chart illustrates the percentage of coverage focused on three key themes: national security and privacy concerns; efficiency over power, and; skepticism regarding potential propaganda narratives. This breakdown highlights how different aspects of the debate have resonated across various media sources. 

DeepSeek Chips Debate Themes

Efficiency Over Power

Analysts have noted that DeepSeek’s approach focuses on optimizing available resources, potentially signaling a shift in AI development strategies. 

“Working with mostly lower-quality chips forced the DeepSeek developers to incorporate a variety of artificial intelligence (AI) optimization techniques that give their machine-learning platform vastly more bang for its buck.” Washington University Source, Feb 3, 2025) 

Crisis & Security Concern

Western media and U.S. policymakers frame DeepSeek as a national security risk. 

Howard Lutnick (U.S. Commerce Secretary nominee): “They stole things. They broke in. They’ve taken our IP.” (Standard Media, Jan 31, 2025) 

There are also concerns about data privacy

“If you download the DeepSeek app on your phone, your data will go back to China.” Newsbusters, Jan 30, 2025) 

Skepticism and Propaganda Concerns

Some Western commentators have expressed doubts about DeepSeek’s claims, suggesting that the narrative might be influenced by strategic interests. For example, Palmer Luckey is quoted stating: 

“I think the problem is they put out that number specifically to harm US companies… You had a lot of useful idiots in US media kind of just mindlessly reporting that that’s the case, and neither China nor the media nor DeepSeek has any kind of incentive to correct the record as a lot of US companies like Nvidia crashed to the tunes of hundreds of billions of dollars.” (New York Post, Jan 29, 2025) 

This skepticism highlights broader concerns about disinformation and how AI advancements are reported globally. Some analysts believe that both Chinese and U.S. media are using DeepSeek’s rise as a tool in a larger economic and political narrative. 

What’s Next?

The DeepSeek debate raises critical questions about the future of AI development: 

  • Are U.S. sanctions working, or are they pushing firms in sanctioned countries toward more efficient AI breakthroughs? 
  • Does this prove that cutting-edge AI doesn’t always require cutting-edge chips? 
  • Will the U.S. tighten restrictions further, or will Nvidia and others find workarounds? 

Conclusion: AI Under Sanctions

Regardless of which chips powered DeepSeek, the larger race is just beginning. This case highlights the shifting nature of global AI competition, the limitations of sanctions, and the innovation that arises under pressure

One thing is certain: the world is watching

This research was conducted by Agility PR Solutions’ team of media analysis experts. 

 

Agility’s DeepSeek deep dive: More coverage analysis

More analysis uncovers the news event’s impact on the AI industry at large, the wild market fluctuations, the “AI chip debate” and legal concerns, and comparisons of DeepSeek’s viral moment to other brands’ media events. Take a look at these deep-dive reports:

Media insights: Our media analysis team examines DeepSeek’s dynamic emergence and media takeover

The DeepSeek phenomenon sparked the interest of our media analysis team, which immediately embarked on comprehensive research to uncover the impact of the news event and the resulting media coverage.

Media Analysis: The DeepSeek ‘ban’ chatter across social media

AI isn’t just advancing—it’s becoming a geopolitical flashpoint. In just a week, speculation about a DeepSeek ‘ban’ exploded on X.com, shaping perceptions before any official action was taken. But how did this narrative take hold so quickly, and what does it reveal about the power of social media in driving public perception?

Media Analysis: DeepSeek’s impact on NVIDIA and the stock market

NVIDIA has long been at the forefront of AI, pushing the boundaries of GPU capabilities and AI-driven computing. But events surrounding the recent emergence of DeepSeek has put the company under an intense spotlight. Our media analysis team breaks it down here.

Media Analysis: Examining DeepSeek’s viral moment

In one viral moment, DeepSeek, the once little-known Chinese tech lab, disrupted the entire AI industry, sending ripples through Silicon Valley and around the world. How does this event compare to other brands’ viral episodes? And how can you be prepared if it happens to you?

Media Analysis: How does DeepSeek’s coverage compare to OpenAI’s?

DeepSeek’s viral emergence was the first real challenge to OpenAI’s dominance in the AI industry, and in media coverage. Here our media analysis team breaks down how OpenAI played this moment strategically and what it tells us about handling viral competitors.

 

Jeremy Parkin

Jeremy Parkin

Jeremy has been operating at the intersection of communications, marketing, and analytics for more than 10 years. Currently leading the media insights group at Agility PR Solutions where he supervises a global team including team leads and a dozen analysts, working with clients in 23 different industries to help them develop media intelligence programs that match up to their specific objectives and realities.