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Investing.com-- U.S. officials are probing whether Chinese AI start-up DeepSeek sourced advanced NVIDIA Corporation (NASDAQ:NVDA) processors through distributors in Singapore, potentially dodging U.S. sanctions, Bloomberg reported on Friday.
Authorities are investigating whether DeepSeek bypassed U.S. restrictions on advanced chip sales to China and used advanced Nvidia technology when developing its R1 model.
The Bloomberg report comes just days after DeepSeek’s R1 took the market by storm, as it appeared to be able to match rival offerings, particularly ChatGPT, while using older hardware and a substantially smaller budget.
DeepSeek- which is backed by Chinese hedge fund High-Flyer- had said in July 2022 that it owned and operated a cluster of 10,000 A100 Nvidia chips, which are a less advanced version of Nvidia’s AI chips, developed specifically for China. The chips are also compliant with U.S. export restrictions.
But R1’s success- where the chatbot overtook ChatGPT as the most downloaded free app on Apple’s App Store- sparked questions over whether the model was developed using advanced Western technology.
Scale AI CEO Alexandr Wang said during a recent interview that DeepSeek has 50,000 Nvidia H100 chips- from Nvidia’s Hopper line, which are currently the most advanced chips sold by the chipmaker. Wang did not provide any evidence for his claims.
Bloomberg had reported earlier this week that Microsoft Corporation (NASDAQ:MSFT) was probing whether DeepSeek improperly accessed proprietary data from OpenAI.
DeepSeek’s release battered U.S. technology stocks this week, with market darling Nvidia wiping out nearly $600 billion in value as the apparently cheaper-to-run and more efficient AI model sparked questions over just how justified were the hundreds of billions of dollars being poured into AI infrastructure.
DeepSeek R1 also sparked questions over just how ahead U.S. companies were in AI development when compared to their Chinese peers.