Chinese AI firm DeepSeek reportedly using shell companies to try and evade U.S. chip restrictions — allegedly procured unknown number of H100 AI GPUs after ban, but Nvidia denies the claim

A new report claims that Chinese AI juggernaut DeepSeek is helping China's military and intelligence operations, and may have even used shell companies to help procure Nvidia chips that are otherwise covered by export restrictions that prevent their sale to China, according to Reuters.

A senior State Department official told Reuters," We understand that DeepSeek has willingly provided and will likely continue to provide support to China's military and intelligence operations, adding the effort goes "above and beyond" open-source access to DeepSeek's AI models.

More interestingly, the official said DeepSeek was using workarounds to get access to advanced Nvidia chips, evading export controls. It is claimed DeepSeek has access to "large volumes" of Nvidia's H100 chip, which has been covered by Washington export restrictions since 2022.

It is alleged by the official in the interview that DeepSeek tried to use Southeast Asia shell companies to get around the restrictions, but wouldn't be drawn on whether it was successful in its endeavours. The same official also claimed DeepSeek was trying to access data centers in Southeast Asia to remotely access U.S. chips.

The news is a continuing sign that Chinese companies are trying their level best to skirt U.S. export restrictions to get their hands on Nvidia's coveted hardware. It follows reports of Chinese companies flying hard drives to Malaysia in suitcases to try and train AI models using Nvidia hardware in rented servers, a phenomenon Malaysia is now investigating.

However, Reuters reports that three sources familiar with the matter told the outlet that DeepSeek does indeed have H100 chips, which it procured after the U.S. banned their sale to China. Notably, it is claimed that the number is much smaller than the 50,000 chips alleged by Scale AI CEO Alexandr Wang in January.

Perhaps understandably, Reuters was not able to verify the number of H100 chips DeepSeek may or may not have, but Nvidia denies the claim. "Our review indicates that DeepSeek used lawfully acquired H800 products, not H100," Nvidia told Reuters.

The H800 chip is a tweaked version of the H100, specifically designed for export to China, sporting nerfed NVLink bandwidth and absent FP64 capabilities.

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