When Chinese start-up DeepSeek released its latest artificial intelligence model last month, it moved Beijing closer to a future it has spent years trying to build.
In a small but meaningful break from American technology, DeepSeek said for the first time that its new model had been optimized to run on chips made by Chinese tech giant Huawei. This was a milestone in China’s long-running efforts to develop advanced technologies at home and reduce the country’s dependence on Western innovation.
While most of the world’s leading AI systems still rely on semiconductors from US chipmaking giant Nvidia, Chinese AI companies are increasingly turning to homegrown alternatives.
The timing of DeepSeek’s announcement — ahead of this week’s planned summit between President Trump and Xi Jinping, China’s leader — gives Beijing fresh confidence going into trade talks that U.S. export controls on Nvidia chips have not derailed China’s AI development.
Before last year’s meeting between the two leaders, Mr. Trump that he planned to discuss Nvidia’s most powerful AI chips with Mr. Xi, fueling speculation that the US could ease restrictions on the technology.
But after years of Washington barring Chinese companies from buying certain advanced technology products, companies like DeepSeek and Moonshot AI are starting to design their AI systems around the restrictions rather than waiting for them to go away. That includes exploring how their models can run on a wider range of processors beyond Nvidia’s.
“US export controls are not freezing China’s AI development,” said Wei Sun, a senior AI analyst at Counterpoint Research in Beijing. “They are forcing China to build an alternative stack.”
DeepSeek has said its latest model can use Huawei chips for inference, the process that allows an AI system to respond to users faster and more accurately. Inference generally requires less computing power than training, the demanding process of teaching a model how it works. DeepSeek still relied on Nvidia chips to train its system, according to two semiconductor industry people who were not authorized to comment publicly on the matter.
It was not immediately clear how DeepSeek gained access to those chips, although Chinese companies can still remotely deploy Nvidia chips in data centers outside of China. DeepSeek did not respond to a request for comment.
Huawei has said it plans to release a chip for training this year. But it also said it would take another year after that before its products could match the performance of Nvidia’s current offerings.
The growing divide between Chinese and American artificial intelligence infrastructure is one consequence that Jensen Huang, Nvidia’s chief executive, has long warned would result from rigid export controls.
He has said the restrictions have only pushed Chinese companies to speed up efforts to build domestic alternatives, which could lead to a bifurcated market: Chinese AI systems run on Chinese chips, while the West sticks to American hardware.
As the world’s dominant manufacturer of AI chips, Nvidia stands to gain from unfettered access to China. But Mr Huang has argued that the strict restrictions will ultimately hurt the US by reducing its influence over China’s artificial intelligence industry.
Two months after his last meeting with Mr. Xi, gave Mr. Trump allowed Nvidia to sell the H200, one of its most powerful chips, to China.
But since then, those chips have been sandwiched between lawmakers in Washington, who seek closer oversight of their use in China, and Beijing, which has directed Chinese tech companies to buy domestic chips.
Commerce Secretary Howard Lutnick told a Senate Appropriations Committee last month that no H200s had actually gone to China, and Nvidia said in regulatory filings this year that it had yet to generate any revenue from H200 sales there. Ahead of this week’s summit in Beijing, the fate of Nvidia’s chips in China is no clearer than it was at the last meeting between Mr. Trump and Mr. Xi.
Analysts expect China’s frustration with US export controls to be part of the discussion when the two leaders meet.
“Chip export controls have consistently been an issue that China opposes,” said Jiang Tianjiao, an associate professor at Fudan University in Shanghai. But as China’s chip-making capabilities improve, officials may not want to interfere in efforts to reduce the country’s reliance on U.S. technologies, he said.
While Chinese tech companies have continued to release high-performance AI systems despite export controls, China’s push for technological self-sufficiency in chipmaking still faces significant hurdles. Semiconductor Manufacturing International Corporation, or SMIC, the Chinese company that makes some Huawei chips, has struggled to produce them at scale. The chips it makes are more prone to defects and use more power than those made by foreign rivals.
Huawei’s solution has been to string large numbers of these weaker chips together to achieve the computing power of more advanced processors – a strategy that depends on SMIC being able to manufacture in large quantities. Even so, Chinese chipmakers are still expected to produce only a small fraction of the advanced semiconductors made by foreign companies such as Nvidia this year.
Before Washington tightened controls, many of Huawei’s chips were made by the Taiwan Semiconductor Manufacturing Company, which makes most of the world’s advanced chips, including Nvidia’s.
Export controls have limited China’s ability to make the large quantities of advanced chips needed for artificial intelligence, said Dan Kim, chief strategy officer at TechInsights, a Canadian research firm, and a Commerce Department official in the Biden administration. But he added that the same restrictions had also pushed Chinese tech companies to innovate in new ways.
Chinese companies are trying to redefine what determines success in the race to build cutting-edge AI For years, the industry’s most advanced systems have come from companies that can afford to spend billions of dollars assembling large numbers of powerful chips.
Now companies like Huawei are betting that success may one day depend less on amassing the most computing power and more on building an integrated ecosystem of chips, AI models and applications good enough for most real-world uses. By working closely with AI model developers like DeepSeek, Huawei can adapt its hardware to better support the software running on it.
When DeepSeek announced its latest model, Huawei said there had been “close collaboration between chip and model technologies from both parties.”
In technical papers describing their models, DeepSeek outlined specific ways chipmakers could modify their products to improve performance with their systems.
“DeepSeek is crying out into the void to Huawei and other companies, ‘Please make these changes so we can get better performance out of your chips,'” said Jacob Feldgoise, an analyst at the Center for Security and Emerging Technology at Georgetown University.
Xinyun Wu contributed reporting from Taipei.
