DeepSeek employs Huawei chips for AI model training to reduce Nvidia reliance.

DeepSeek, a Chinese technology firm, is reportedly using some of Huawei's processors to train smaller AI models, aiming to reduce its reliance on Nvidia. This move comes after the company stunned the world by testing AI accelerators in January.

In a strategic move aimed at reducing its reliance on Nvidia, DeepSeek, a leading Chinese AI company, has confirmed that it will use Huawei's AI chips to train smaller AI models. This decision aligns with China's broader push for domestic chip adoption, driven by geopolitical tensions and U.S. export restrictions.

DeepSeek, which has been a prominent player in the AI sector, is reportedly using Huawei's Ascend processors to train smaller versions of its R2 model. The R2 model, which has not yet been publicly released, has reportedly faced delays due to issues with Huawei's chips. Despite this, DeepSeek continues to use Nvidia's processors for its more powerful models. This dual approach allows DeepSeek to maintain a balance between leveraging its existing infrastructure and exploring new domestic alternatives.

The move by DeepSeek to use Huawei's chips is part of the broader Chinese government's initiative to reduce reliance on foreign technology. China aims to triple its domestic AI chip production by 2027, which could significantly impact the market share of international players like Nvidia. This shift underscores the evolving geopolitical landscape and the strategic adaptability of companies in the AI sector.

For investors, this shift highlights the ongoing geopolitical tensions and the strategic adaptability of companies operating in the AI and semiconductor sectors. While Nvidia continues to face challenges due to regulatory restrictions, its focus on autonomous driving and industrial AI offers a potential counterbalance. Nvidia's AGX Thor SoC, for instance, has driven significant growth in its automotive revenue, surging 103% year-over-year in Q1 2025 and projecting $5 billion in revenue by 2026.

DeepSeek's strategic pivot towards Huawei's chips also reflects a broader trend of Chinese companies seeking to develop and integrate domestic technology solutions. This trend is evident in the growth of Cambricon, a Chinese AI chip company, which reported a 4,000% surge in revenue and swung to profit in the first half of 2025.

In conclusion, DeepSeek's move to use Huawei's AI chips underscores the evolving geopolitical landscape and the strategic adaptability of companies in the AI sector. As China continues to push for domestic chip adoption, the interplay between regulatory pressures and technological innovation will shape the future of global AI and semiconductor markets.

References:
[1] https://www.ainvest.com/news/deepseek-shifts-nvidia-partners-huawei-ai-chips-2508/
[2] https://www.huaweicentral.com/deepseek-to-use-huawei-chips-over-nvidia-for-small-ai-models-training/
[3] https://www.ainvest.com/news/tech-commerce-stocks-spotlight-assessing-alibaba-nvidia-marvell-moves-ai-earnings-turbulence-2508/