Nvidia shares slipped after a report that DeepSeek, the Chinese startup behind the R1 model, is designing its own AI chip to cut its reliance on Nvidia hardware. The chip targets inference and remains early-stage, but it adds DeepSeek to a growing list of AI firms building silicon in-house.
Nvidia fell 1.63% intraday after Reuters reported that DeepSeek, the Hangzhou-based startup behind the globally viral R1 reasoning model, is developing its own AI chip. The effort targets inference — the stage where a trained model generates responses — and remains early-stage, with the company reaching out to chip-design, foundry, and memory partners over roughly the past year.
DeepSeek has quietly increased hiring of chip-design engineers without posting public job listings, three people familiar with the matter said. An in-house inference chip would reduce its dependence on Nvidia hardware.
U.S. export controls barred Chinese companies from buying Nvidia’s most advanced chips, pushing DeepSeek toward a mix of Nvidia’s older H800 — banned by Washington in late 2023 — and Huawei’s Ascend processors, which still lag Nvidia’s best by a wide margin. Building its own chip would loosen that constraint.
Huawei currently holds roughly half of China’s $50 billion domestic AI chip market, but that position is already under pressure from Alibaba and Baidu, which are building their own chips and gaining share.
DeepSeek would not be alone in the push. OpenAI last month launched Jalapeno, its first custom inference chip developed with Broadcom, and Anthropic has been weighing a similar move.
Source: TradingView (GuruFocus)
Trading involves risk.
Risk Disclaimer
