Nvidia Corporation (NASDAQ:NVDA) shares are trading lower following reports suggesting China’s DeepSeek is developing AI chips for inference, which reduces its reliance on the company.
DeepSeek’s Quiet Push Into Semiconductors
According to Reuters, DeepSeek is developing its own AI chip designed for inference — the stage of AI computing in which a trained model generates responses for users — rather than for training new models. The effort began approximately a year ago and remains at an early stage, with DeepSeek reaching out to external chip-design, foundry and memory companies. The company has also quietly increased hiring of chip-design engineers in recent months without posting public job listings.
If successful, the move would mark a major strategic shift for DeepSeek — widely regarded as China’s AI champion — and could reduce its reliance on both Nvidia and Huawei chips, which it has historically depended on to train and run its globally popular models.
The Broader Context
DeepSeek would be joining a growing list of AI companies seeking to reduce dependence on Nvidia by developing custom silicon. OpenAI last month unveiled Jalapeño, its first custom inference chip developed with Broadcom, while Anthropic has been weighing building its own chips, Reuters reported in April.
Nvidia Shares Fall
NVDA Price Action: At the time of publication, Nvidia shares are trading 1.62% lower at $192.39, according to data from Benzinga Pro.
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