DeepSeek's AI Model Shakes Up U.S. Tech Industry Amid Chip Smuggling Concerns

The U.S. Commerce Department is investigating whether DeepSeek, a Chinese firm, used prohibited U.S. chips for their groundbreaking AI model. The model's success stirred U.S. tech concerns and impacted stock markets. There are allegations of AI chip smuggling involving several countries, including Malaysia and Singapore.


Devdiscourse News Desk | Updated: 31-01-2025 07:32 IST | Created: 31-01-2025 07:32 IST
DeepSeek's AI Model Shakes Up U.S. Tech Industry Amid Chip Smuggling Concerns

The U.S. Commerce Department is currently probing allegations that DeepSeek, a Chinese tech company, may have used U.S.-made chips that are not authorized for export to China. This comes after DeepSeek's AI model gained rapid popularity, raising concerns about the U.S. maintaining its technological edge.

DeepSeek's newly launched AI assistant quickly became the top downloaded app on Apple's App Store, impacting the U.S. tech sector by causing a $1 trillion valuation drop. The company claims its assistant is more cost-effective and efficient, yet it faces scrutiny over its chip sourcing practices amid strict U.S. export restrictions.

Reports suggest organized smuggling of AI chips into China from nations like Malaysia and Singapore. Nvidia, a chip provider, has highlighted the need for compliance with export laws. Meanwhile, discussions continue in the U.S. about extending restrictions on AI chip exports to other countries under the Biden administration.

(With inputs from agencies.)

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