DEEPSEEK PROVIDED NVIDIA (NASDAQ: NVDA) Chips?

The United States is investigating whether Chinese artificial intelligence disruptor Deepseek used limited nvidia (NVDA) chips to train its latest AI models.

Officials are investigating whether Deepseek purchased advanced NVDA sorts of half through third parties in Singapore to bypass US restrictions on the sale of chips to China, Bloomberg Reported Friday, January 31st.

Last week, China’s Deepseek launched a new AI model, R1, which it claims was trained for a fraction of the cost and energy consumption of similar executing chatbots. It quickly topped the Apple App Store as the most downloaded free app and triggered a routine in technology warehouse tied to AI-BUILD-OUT.

It comes when pressure grows on tech companies such as NVDA and AMD (AMD) to cut off AI tape with Chinese companies, with a Republican senator sponsoring a bill to end all cooperation on the US and China.

Forbidden NVDA chips used?

Openai said this week that it is looking at Deepseek “inappropriate” used his technology. But now officials seem to be concerned that Deepseek has also found a back door to access limited chips.

Nvidia’s H800 chips, which are limited to sale to China, may have been used by Deepseek to train R1 and its previous V3 models. The United States first introduced export restrictions on chips in 2022, and later, in October 2023, the H800 excluded from sales to China. The removed H20 was the answer, but now the White House could ban it as well.

Sources indicated to Bloomberg and Reuters News agencies that purchases may have been routed through Singapore, which accounts for 20% of NVDA sales.

“We insist that our partners comply with all applicable laws, and if we receive information to the opposite, you must act accordingly,” NVDA said Reuters.

Political press amplifiers on NVDA

This week, GOP senator Josh Hawley introduced legislation aimed at protecting America’s AI management and technology against being used by Chinese companies. The decoupling of America’s artificial intelligence functions from the China Act would ban US companies exporting AI technology, such as advanced chips to China.

Meanwhile, President Donald Trump is reportedly considering tightening restrictions on NVDA’s sale of its H20 chips to the Chinese market.

And Trump’s nominees for trade secretary have no doubt what is happening.

“Nvidia’s chips, which they bought tons of, and they found their ways around it, drives their Deepseek model,” he said during his confirmation hearing Wednesday. “It has to end,” he added.

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With 37 purchases and 3 team assessments, NVDA enjoys a strong purchase consensus assessment. The average NVDA price target of $ 178.63 suggests a potential upside of approx. 43%.

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