DeepSeek developing its own AI chip to cut Nvidia reliance

Chinese AI startup DeepSeek is developing a proprietary AI chip designed for inference — the process by which trained models generate responses for users — according to a Reuters exclusive report citing three sources familiar with the matter. The effort marks the latest move by one of China's most prominent AI companies to reduce its dependence on foreign hardware amid tightening U.S. export controls.finance.biggo+1

A Quiet Effort Takes Shape

The chip-design project began roughly a year ago and remains in its early stages, according to the sources. DeepSeek has been engaging chip-design firms, foundry partners, and memory suppliers while quietly recruiting semiconductor design engineers. The company has not publicly commented on the initiative.businesspost+1

A DeepSeek inference chip would target the fastest-growing segment of AI computing demand. As AI applications proliferate, an increasing share of computing resources is devoted to running models rather than training them, making custom inference hardware a strategically valuable asset.streetinsider

The effort also aligns with earlier signals: a DigiTimes Asia report in early 2025 noted that DeepSeek had "initiated a major recruitment drive for semiconductor design talent, signaling potential plans to develop its proprietary processors".techpowerup

Reducing Dependence on Nvidia and Huawei

DeepSeek has historically relied on Nvidia ↘ 5.87% chips for training its models. A Trump administration official confirmed earlier this year that DeepSeek's V4 model was trained on Nvidia's most advanced Blackwell chip, apparently breaching U.S. export regulations. In April, DeepSeek released V4 optimized for Huawei's Ascend chips, underscoring China's push toward tech autonomy.reuters+2

But relying on Huawei chips still leaves DeepSeek dependent on another company's roadmap. A custom inference chip would give the startup greater control over performance, cost, and supply — critical factors as it scales to serve a rapidly growing user base.

Fundraising and Ambition

The chip project coincides with DeepSeek's first outside fundraising. In June, Reuters and Bloomberg reported the company was close to raising approximately 50 billion yuan ($7.4 billion), with Tencent and CATL Contemporary Amperex Technology Co., Limited among the largest investors. The round could value DeepSeek at between $52 billion and $59 billion, with founder Liang Wenfeng contributing 20 billion yuan of personal funds.cnbc+2

Developing a custom chip is a capital-intensive undertaking that could take years to yield results. But for a company already known for achieving frontier AI performance at low cost, the bet reflects an ambition that extends well beyond software.