DeepSeek Develops AI Chip to Reduce Reliance on Nvidia

Chinese artificial intelligence startup DeepSeek is developing its own AI chip in an effort to reduce its dependence on processors supplied by Nvidia and Huawei, according to three people familiar with the matter, Reuters reported the development.

DeepSeek has reportedly developed its own artificial intelligence chip.

Sources said the chip is being designed primarily for AI inference—the stage in which trained AI models generate responses to users—rather than for training new models.

If successful, the initiative would represent a significant strategic shift for DeepSeek, which has become one of China's most prominent AI companies and has focused largely on developing advanced AI models rather than semiconductor hardware.

Following the report, shares of Nvidia fell about 1.6 percent in premarket trading.

Richard Windsor, an analyst at Radio Free Mobile, said the move is unlikely to have a significant impact on Nvidia's global business.

"Nvidia is at zero in China and staying there. DeepSeek has almost no chance of selling silicon outside of China unless it gets access to leading-edge manufacturing," Windsor said.

DeepSeek gained international attention after releasing highly efficient AI models that attracted widespread use around the world.

Although Huawei's AI chips still trail Nvidia's most advanced products in performance, U.S. export restrictions have enabled Huawei to capture roughly half of China's estimated $50 billion AI chip market, supplying DeepSeek and other domestic AI developers.