July 7 (Reuters) – Chinese startup DeepSeek is developing its own AI chip, according to three people familiar with the matter, a push that could reduce its reliance on Nvidia and Huawei chips, which it has depended on to train and run its globally popular models. <\/p>\n
The chip is designed for inference \u2014 the stage of \u200cAI computing in which a trained model generates responses for users \u2014 rather than for training new models, the sources said. <\/p>\n
If successful, DeepSeek’s expansion into semiconductor development would \u200cmark a major strategic shift for a company widely hailed in China as the country’s AI champion, potentially adding to challenges faced by Chinese tech giant Huawei. <\/p>\n
Shares of U.S.-based Nvidia slipped about 1.6% in premarket trading. <\/p>\n
“Nvidia is at zero \u200bin China and staying there. DeepSeek has almost no chance of selling silicon outside of China unless it gets access to leading edge manufacturing,” said Analyst Richard Windsor of Radio Free Mobile, adding that the development does not affect the chipmaker. <\/p>\n
DeepSeek rose to global fame more than a year ago after releasing two highly efficient AI models that went viral worldwide, surprising many in Silicon Valley and Washington. <\/p>\n
The company has long been known for emphasizing AI model breakthroughs rather than commercializing its technology. <\/p>\n
Although Huawei’s offerings still lag Nvidia’s most advanced chips by a wide margin, a U.S. ban on their \u200cexports to China has helped Huawei gain around half of the $50 \u2060billion domestic AI chip market, supplying DeepSeek and several other leading industry players. <\/p>\n
However, Huawei’s hold on the market is already weakening as tech rivals Alibaba and Baidu develop their own AI chips and gain market share. <\/p>\n
DeepSeek’s effort to join that race remains at an early stage, with the company reaching \u2060out to external partners and holding discussions with chip-design, foundry and memory companies, the three sources said. The effort began about a year ago, one of the people said. <\/p>\n
The Hangzhou-based company has also increased hiring of chip-design engineers in recent months, but recruitment has been done privately without job postings on public hiring platforms, two of the sources said. <\/p>\n
All three people declined to be identified because the information is not \u200bpublic. \u200bDespite becoming a standard-bearer of China’s AI ambitions, DeepSeek has kept a low profile. The company did not \u200brespond to a request for comment. <\/p>\n
FOLLOWING GLOBAL TRENDS <\/p>\n
With an in-house chip, DeepSeek \u200cwould be joining other global AI developers in seeking greater control over the hardware behind their models and reduced dependence on Nvidia’s. <\/p>\n
OpenAI last month unveiled Jalapeno, its first custom inference chip, developed with Broadcom, while Anthropic has been weighing building its own AI chips, Reuters reported in April. <\/p>\n
For DeepSeek, the effort carries an added strategic dimension. U.S. export controls bar Chinese companies from buying Nvidia’s most advanced chips, and Beijing has been pressing its technology champions to build domestic alternatives. <\/p>\n
DeepSeek founder Liang Wenfeng said in a rare 2024 interview with a Chinese media outlet that chip export controls were a challenge for the company. <\/p>\n
DeepSeek has used both Nvidia and Huawei chips. The company has said the foundation model underpinning R1, the reasoning model whose low-cost performance triggered \u200ca rout in U.S. tech stocks in January 2025, was trained on Nvidia’s H800, a chip designed for \u200bthe Chinese market that Washington banned in late 2023. <\/p>\n
The company has since leaned increasingly on Huawei. In April it \u200breleased its V4 model adapted for Huawei’s Ascend chips, and Huawei said its processors \u200bwere used in part of the training of V4-Flash, a lighter version of the model. Orders for Huawei’s Ascend 950 chips from Chinese tech conglomerates \u200csurged after the launch, Reuters has reported. <\/p>\n
TAPPING INFERENCE DEMAND <\/p>\n
A DeepSeek inference chip \u200bwould target the fastest-growing segment of AI computing \u200bdemand. As AI applications spread, more of the industry’s computing work is shifting from training models to running them, which relies on specialised chips that can be cheaper and less power-hungry than general-purpose GPUs. <\/p>\n
However, there is no guarantee of success. Designing a competitive AI chip typically takes years and significant capital. Manufacturing poses another hurdle as the U.S. \u200bbans Chinese designers from accessing the most advanced overseas foundries, while \u200cseparate U.S. curbs have cut China’s access to high-bandwidth memory, a component critical to AI inference chips. <\/p>\n
DeepSeek’s chip push coincides with the company’s first embrace of outside \u200bcapital. The company was slated to raise $7 billion in a maiden funding round valuing it at between $52 billion and $59 billion, Reuters reported in June, reversing its \u200byearslong strategy of rejecting external investment. <\/p>\n
(Reporting by Reuters staff; Editing by Eduardo Baptista and Tomasz Janowski) <\/p>\n","protected":false},"excerpt":{"rendered":"July 7 (Reuters) – Chinese startup DeepSeek is developing its own AI chip, according to three people familiar…\n","protected":false},"author":2,"featured_media":748785,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,144,242023,4321,74],"class_list":["post-748784","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-china","tag-chip-design","tag-nvidia","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/748784","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=748784"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/748784\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/748785"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=748784"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=748784"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=748784"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}