The Chinese AI lab recently rocketing itself to the top of the technology markets all over the world, DeepSeek is currently the subject of another geopolitical and technological conflict. This time around the emphasis is not the performance of its next AI model but the first to see it. It was also a major departure of the industry practice when DeepSeek has reportedly not invited the major American chipmakers, such as Nvidia and Advanced Micro Devices, to early access to its latest flagship model. Rather, the company has provided the local Chinese suppliers, such as Huawei Technologies, a lead in streamlining the software to their hardware.
Close interaction between AI creators and chip producers has been the norm, and practically essential procedure to roll out large-scale model upgrades. The AI systems are incredibly dependent on specialized hardware to be efficient. Nvidia and AMD companies usually obtain pre-release editions of large AI models in order to optimize drivers and software layers to run their processors optimally. DeepSeek, in its turn, had been collaborating with the Nvidia engineering departments. This is why this decision by the latest is of particular interest.
Sources close to the deal claim that DeepSeek did not give Nvidia or AMD a preview of its next model, believed to be named V4, which was due around the Lunar New Year. Chinese chipmakers on the other hand had a few weeks to prepare their systems. Nvidia and AMD did not release any official statement on the creation, as well as DeepSeek and Huawei. Lack of official explanations has further increased speculations in the industry.
Strategically, the move can only be considered as an indication of something more than a product routine decision. It can be seen as the manifestation of the increasing complexity of the AI competition on the globe, where the technology, national interests, and commercial interests come and collide. Ben Bajarin, the CEO of creative strategies research, observed, the effect on Nvidia and AMD to general data accelerators is not a major one, that most enterprises are not executing DeepSeek which is a benchmarking model more than a benchmarking model. He also noted that software optimization to particular hardware now takes weeks or less time compared to several months before the development of AI coding tools. Differently put, the direct loss in terms of financial harm to the US chip manufacturers can be restricted. Nevertheless, the symbolic change is difficult to disregard.
The success of DeepSeek in the last one year has been impressive. As of early 2025 its models have been reportedly downloaded over 75 million times on the open-source AI platform Hugging Face. A wider trend of Chinese open-source AI systems that has become increasingly competitive with American labs was aided by the surge. Chinese-made models have leads in downloads in the last year alone on that platform compared to any other country. This is quick development which has not escaped notice in Washington.
The time frame of the hardware decision by DeepSeek is in line with the time frame of fresh scrutiny on the US export controls. One of the most senior officials in the Trump administration recently revealed in the report of Reuters that the most recent AI system that DeepSeek has trained was developed using the Nvidia Blackwell chip cluster that was the most advanced and installed on the mainland of China. Such application would, in case of its truth, cast grave doubts on adherence to US export prohibitions. The Blackwell architecture is the most recent production of Nvidia AI accelerators, which are built to handle large training workloads. The availability of these chips has been strictly controlled according to the US policy to restrict the power of China to build sophisticated AI.
The same official proposed that DeepSeek could also make an effort to erase any technical evidence showing that it has had dependencies on American chips and positionally claim that the training was done on Huawei hardware. That assertion, which has not been confirmed, highlights the larger trust deficit that has become the defining approach to US-China relations in technology. Even technical optimization choices have diplomatic significance when supply chains of hardware are turned into tools of national policy.
The US government has already been walking a fine line between export restrictions and business interests. Last year, the government has given Nvidia and AMD permission to resell their H20 and MI308 chips to China. All these processors are optimized more towards AI inference, the step of applying trained models to do work, than the more resource-heavy training step. The MI308 specifically, was in high demand and it was bringing in hundreds of millions of dollars worth of sales to the AMD company on a quarterly basis. However, the most sophisticated processors are still limited and it is still unclear that DeepSeek got permission to procure such hardware.
Regarding the industry, one of the aspects that can be identified as subtle but purposeful is the decision made by DeepSeek. The company focuses on internal optimization of the Chinese AI ecosystem by ensuring that it selects suppliers within China, such as Huawei, as a means of optimization support. Regardless of the fact that American chips may still be used to serve some of the infrastructure, software congruity is leaning towards local solutions. In the long-term, this may decrease the dependency on hardware suppliers based in the US in the Chinese market.
Given that I have observed the semiconductor industry developing in the last ten years, the change seems to be symbolic of a larger decoupling. Some years ago, the idea of cross-border cooperation in the development of AI was mostly presented as the win-win situation of exchange of experience. Nowadays, any kind of partnership is analyzed in terms of strategic advantage. Even the engineers can be thinking about the performance measures and latency benchmarks, although the executives and policymakers are computing leverage.
It is also notable that the majority of businesses around the world do not rely on the models of DeepSeek to keep their operations going. The releases of the lab are often perceived as standards by which the hardware ability is tested but not as the final production instrument. This fact moderates the short-term business implications of Nvidia and AMD. But perception is significant in the technology markets. The fact that it was not part of the initial optimization cycles might be an indicator of a transformation of alliances.
DeepSeek is said to be among a number of Chinese AI companies that are set to roll out new models in the month. Every release is the beginning of an ever-expanding story about technological competition that is not about mere performance scores. It is no longer just which model is faster or cheaper, but it is the ecosystem that becomes default.
The real effect of the decision of DeepSeek will be based on the response of the enterprises, regulating bodies, and hardware suppliers in the coming months. In case optimization gaps can be actually reduced in a matter of weeks, as Bajarin believes, the disruption can be a temporary one. However, when the relocation increases the pace of local maturity of Chinese domestic chip industry, it may be a turning point.
