DeepSeek developing its own AI chip to reduce reliance on Nvidia

Chinese AI company DeepSeek is developing its own artificial intelligence (AI) chip, according to three people familiar with the matter, in a move that could loosen its grip on foreign hardware and a major setback for U.S. chipmaking company, Nvidia.

The chip is built for inference, the stage where a trained AI model actually generates answers for users. It is not meant for training new models. The push is designed to cut DeepSeek's reliance on Nvidia and Huawei, the two chipmakers it has leaned on so far to build and run its systems.

DeepSeek has not responded to requests for comment on the report.

DeepSeek shook up the global AI industry last year when its R1 model matched the performance of far more expensive American systems, triggering a sharp selloff in US tech stocks. The company built its reputation on doing more with less. A homegrown chip would be the next step in that same strategy, giving it more control over its own hardware instead of depending on outside suppliers.

It would also put DeepSeek in the same company as some of the biggest names in AI. OpenAI unveiled its own custom inference chip last month, built with Broadcom. Anthropic has reportedly been exploring building its own chips too.

US export rules block Chinese companies from buying Nvidia's most advanced chips. Beijing has been pushing its top tech firms to build homegrown alternatives instead. DeepSeek's founder, Liang Wenfeng, said in a rare interview back in 2024 that chip export controls were a real challenge for the company.

DeepSeek has used both Nvidia and Huawei chips up to now. It has leaned more heavily on Huawei recently, releasing a version of its V4 model built around Huawei's Ascend chips earlier this year.

Building a competitive AI chip usually takes years and serious money. DeepSeek would also need to get it manufactured, and US rules already block Chinese chip designers from using the most advanced overseas factories. No foundry, timeline, or manufacturing partner has been confirmed yet.

The chip push comes as DeepSeek is also opening up to outside money for the first time. The company was reportedly preparing to raise $7 billion in a first funding round, valuing it between $52 billion and $59 billion, a shift from its longstanding refusal to take outside investment.