U.S.–China AI tensions intensified after a senior Trump administration official said Washington believes Chinese startup DeepSeek used Nvidia Corp.’s (NASDAQ:NVDA) most advanced chips to train its upcoming model, raising fresh export control concerns.
U.S. Flags Potential Blackwell Export Violation
A senior Trump administration official said U.S. officials believe Chinese AI startup DeepSeek trained its next AI model, which could launch by next week, on Nvidia’s most advanced AI chip, the Blackwell, potentially in violation of U.S. export controls.
The official said the U.S. expects DeepSeek to strip out technical indicators that could reveal the use of American AI chips and believes the Blackwell chips are likely clustered at DeepSeek’s data center in Inner Mongolia, Reuters reported on Monday.
Benzinga has contacted Nvidia’s investor relations team for comment and is awaiting a response.
The report adds pressure to an already divisive debate in Washington over where to draw the line on China’s access to top-tier U.S. AI chips.
The Commerce Department’s export controls currently bar Blackwell shipments to China.
Trump previously signaled openness to Nvidia selling a scaled-down Blackwell in China in August, but later reversed course, arguing the most advanced chips should stay with U.S. companies.
The Trump administration official also said DeepSeek’s training process likely relied on “distillation” from leading U.S. AI models, including Anthropic, Alphabet Inc. (NASDAQ:GOOGL) Google, OpenAI, and xAI.
China’s AI Push And Nvidia’s Supply Response
The scrutiny underscores Beijing’s broader push to reduce reliance on U.S. technology. Alibaba Group Holding Ltd. (NYSE:BABA) recently introduced a high-end AI chip through its T-Head unit as part of China’s domestic semiconductor strategy.
At the same time, Chinese technology firms placed sizable orders for Nvidia’s H200 GPUs. The surge in demand prompted Nvidia to urge Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) to increase output. With Chinese demand exceeding available supply, Nvidia raised production plans for the second quarter of 2026.
Strong Global Demand And China’s Revenue Potential
Despite export uncertainty, Nvidia continues to benefit from robust global AI demand. The company has disclosed a backlog exceeding $500 billion as hyperscalers invest heavily in AI infrastructure.
JPMorgan analyst Harlan Sur said U.S. export approvals could unlock billions in additional revenue for Nvidia, making China a significant potential upside catalyst for the stock.
Chinese customers continue to show a strong appetite for AI compute, and any easing in export approvals could immediately convert that demand into revenue.
NVDA Price Action: Nvidia shares were up 0.37% at $192.25 during premarket trading on Tuesday, according to Benzinga Pro data.
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