DeepSeek, the Chinese AI startup that sparked fears of shrinking demand for Nvidia Corp’s (NASDAQ:NVDA) top-tier chips, is now reportedly seeking to buy those very processors.
China Reportedly Clears DeepSeek To Buy Nvidia Chips
China has approved DeepSeek to purchase Nvidia’s H200 artificial intelligence chips, though the deal is subject to regulatory conditions that are still being finalized, Reuters reported on Friday, citing two people familiar with the matter.
Earlier this week, the publication reported that ByteDance, Alibaba Group Holdings (NYSE:BABA), and Tencent Holdings (OTC:TCEHY) have been allowed to collectively purchase more than 400,000 Nvidia H200 chips.
China’s industry and commerce ministries issued the approvals, while final conditions are still being determined by the National Development and Reform Commission, the country’s top economic planner, the report said.
US-China Tech Tensions
The H200 is Nvidia’s second-most powerful AI chip and has become a focal point in U.S.-China technology tensions.
Although the U.S. earlier this month cleared exports of the chip to China, Beijing retains the final authority over whether shipments are allowed to proceed.
Nvidia CEO Jensen Huang said Thursday in Taipei that the company had not received confirmation of such approvals.
From Nvidia Threat To Nvidia Customer
DeepSeek rattled global markets in early 2025 after unveiling a low-cost AI model that matched the performance of leading U.S. systems at a fraction of the development cost.
The announcement fueled concerns that demand for high-end AI chips could be overestimated, triggering a sharp pullback in Nvidia shares.
Those fears now appear premature. Any DeepSeek purchase of H200 chips would signal continued reliance on Nvidia’s most advanced hardware, even as AI developers pursue greater efficiency.
Futurum Group CEO Daniel Newman dismissed the bearish narrative in a post on X, writing, “The moronic takes on DeepSeek ending $NVDA that made my eyeballs bleed… When in reality DeepSeek is lining up for H200s.”
Geopolitical Scrutiny Looms Over Chip Sales
Previously, it was reported that a senior U.S. lawmaker had alleged that Nvidia-assisted DeepSeek models were later used by the Chinese military.
DeepSeek is expected to release its next-generation AI model, V4, in mid-February.
Price Action: Nvidia shares closed Friday at $191.13, down 0.72% with the stock slipping a further 0.49% in after-hours trading to $190.20, according to Benzinga Pro.
Nvidia earns a strong Quality rating in Benzinga’s Edge Stock Rankings, backed by a positive price trend across short, medium, and long-term time frames.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
Recent Comments