[ed. As predicted. China got the chips, Trump and Witkoff got the millions.]
The U.S. believes DeepSeek will remove the technical indicators that might reveal its use of American AI chips, the official said, adding that the Blackwells are likely clustered at its data center in Inner Mongolia, an autonomous region of China.
Nvidia declined to comment, while the Commerce Department and DeepSeek did not respond to requests for comment. [...]
U.S. government confirmation of DeepSeek obtaining the chips, first reported by Reuters, could further divide Washington policymakers as they struggle to determine where to draw the line on Chinese access to the crown jewels of American AI semiconductor chips.
White House AI Czar David Sacks and Nvidia CEO Jensen Huang argue that shipping advanced AI chips to China discourages Chinese competitors like Huawei from redoubling efforts to catch up with Nvidia's and AMD's technology.
But China hawks fear chips could easily be diverted from commercial uses to help supercharge China's military and threaten U.S. dominance in AI.
"This shows why exporting any AI chips to China is so dangerous," said Chris McGuire, who served as a White House National Security Council official under former President Joe Biden.
"Given China's leading AI companies are brazenly violating U.S. export controls, we obviously cannot expect that they will comply with U.S. conditions that would prohibit them from using chips to support the Chinese military," he added.
US CONCERNS
U.S. export controls, overseen by the Commerce Department, currently bar Blackwell shipments to China.
In August, U.S. President Donald Trump opened the door to Nvidia selling a scaled-down version of the Blackwell in China. But he later reversed course, suggesting the firm's most advanced chips should be reserved for U.S. companies and kept out of China.
Trump's decision in December to allow Chinese firms to buy Nvidia's second most advanced chips, known as the H200, drew sharp criticism from China hawks, but shipments of the chips remain stalled over guardrails built into the approvals.
"Chinese AI companies' reliance on smuggled Blackwells underscores their massive shortfall of domestically produced AI chips and why approvals of H200 chips would represent a lifeline," said Saif Khan, who served as director of technology and national security at the White House's National Security Council under former President Joe Biden. [...]
Hangzhou-based DeepSeek shook markets early last year with a set of AI models that rivaled some of the best offerings from the U.S., fueling concerns in Washington that China could catch up in the AI race despite restrictions.
The Information previously reported that DeepSeek had smuggled chips into China to train its next model. Reuters is reporting for the first time on the U.S. government's confirmation of the chips' use for that purpose in DeepSeek's Inner Mongolia-based facility.
by Steve Holland and Alexandra Alper, Reuters | Read more:
[ed. How did they get these chips? Anatomy of Two Giant Deals: The U.A.E. Got Chips. The Trump Team Got Crypto Riches (NYT):]
***
At the heart of their relationship are two multibillion-dollar deals. One involved a crypto company founded by the Witkoff and the Trump families that benefited both financially. The other involved a sale of valuable computer chips that benefited the Emirates economically. [...]In May, Mr. Witkoff’s son Zach announced the first of the deals at a conference in Dubai. One of Sheikh Tahnoon’s investment firms would deposit $2 billion into World Liberty Financial, a cryptocurrency start-up founded by the Witkoffs and Trumps.
Two weeks later, the White House agreed to allow the U.A.E. access to hundreds of thousands of the world’s most advanced and scarce computer chips, a crucial tool in the high-stakes race to dominate artificial intelligence. Many of the chips would go to G42, a sprawling technology firm controlled by Sheikh Tahnoon, despite national security concerns that the chips could be shared with China. [...]
Mr. Trump made no public mention of the $2 billion transaction with his family company.
