Chinese AI startup DeepSeek is developing its own artificial intelligence chip, a move that could lessen its dependence on Nvidia and Huawei hardware, according to three people familiar with the matter cited in a recent Reuters report.
The chip is being designed for inference, the stage of AI computing where a trained model generates responses for users, rather than for training new models, explains the report. The project remains at an early stage, with DeepSeek reaching out to external partners and holding discussions with chip-design, foundry, and memory companies, the sources said. The effort began roughly a year ago.
DeepSeek has also quietly stepped up hiring of chip-design engineers in recent months, though it has not posted roles on public platforms, two of the sources added. The company, known for its low-profile approach despite becoming China's AI standard-bearer, did not respond to a request for comment.
The push marks a strategic shift for a company that has historically prioritised model breakthroughs over commercial expansion. It also follows a broader industry trend: OpenAI last month unveiled its own custom inference chip, while Anthropic has been weighing a similar move, Reuters has previously reported.
For DeepSeek, the incentive is particularly sharp. US export controls bar Chinese firms from buying Nvidia's most advanced processors, and Beijing has urged its tech champions to build domestic alternatives. DeepSeek has used both Nvidia and Huawei chips in the past, but has increasingly leaned on Huawei's Ascend line. An in-house chip would give it greater control and potentially lower costs, particularly as inference demand soars.
However, significant hurdles remain. Designing a competitive AI chip typically takes years and heavy investment. Manufacturing is also constrained, as separate US curbs block Chinese companies from accessing the most advanced overseas foundries and high-bandwidth memory, a critical component for inference chips.
News of the effort nudged Nvidia shares down about 2% in premarket trading. The chip push coincides with DeepSeek's first embrace of outside capital, with the company poised to raise $7 billion in a maiden funding round, Reuters reported last month.
