The Trump administration is considering severe penalties that could block China’s DeepSeek from purchasing U.S. technology, and possibly prevent Americans from accessing its services, according to a report from the New York Times on Wednesday. The U.S. government’s move comes in response to the launch of DeepSeek, China’s new low-cost AI model, which has sent shockwaves through the AI ecosystem. As the Chinese start-up gains traction, the U.S. is ramping up efforts to crack down on its operations and its reliance on technology from major companies like Nvidia.
The U.S. Cracks Down on Nvidia’s AI Chips
At the heart of the U.S. government’s concerns are Nvidia’s AI chips, which have become integral to DeepSeek’s operations. U.S. export controls have focused heavily on preventing the sale of the most advanced AI chips to China, and the latest actions target Nvidia’s H20 AI chip. This move marks the continuation of efforts to maintain America’s lead in the global AI race by restricting China’s access to cutting-edge semiconductor technology. Nvidia recently warned investors that these new restrictions could cost the company a staggering $5.5 billion in potential sales.
U.S. House Select Committee’s Inquiry Into Nvidia
The U.S. House Select Committee on China has escalated its scrutiny by sending a formal letter to Nvidia. In the letter, the committee demands answers about Nvidia’s chip sales to China and Southeast Asia, aiming to investigate how these chips ended up powering DeepSeek’s AI models. This inquiry comes amid concerns that the export of U.S. technology to China could be enabling the development of military capabilities, with AI chips playing a central role in this process.
The Ongoing U.S.-China Tech Tensions
For the past few years, the U.S. has restricted the sale of its most advanced chips to China, citing national security risks. The concerns are that these chips, especially in the hands of Chinese tech giants like DeepSeek, could be used to bolster China’s military technologies. The U.S. fears that China could use these technologies to gain an advantage in areas such as military AI, which has become an increasingly critical part of modern warfare. The latest move against DeepSeek and Nvidia is another example of the ongoing trade war and tech rivalry between the two superpowers.
Uncertainty Looms Over U.S. Tech Exports to China
As the Trump administration weighs its next steps, the future of U.S. tech exports to China hangs in the balance. Nvidia, in particular, faces an uncertain road ahead, as these restrictions could significantly impact its business with Chinese clients. While Nvidia has already been banned from exporting its most advanced chips to China since 2022, the new restrictions on the H20 chip signal a more aggressive stance from the U.S. government to curtail China’s access to vital AI technologies. Both DeepSeek and Nvidia have yet to respond publicly to these latest developments, leaving investors and industry watchers on edge about what comes next.