U.S. officials are investigating whether Chinese artificial intelligence startup DeepSeek skirted American export restrictions on advanced chip sales and bought advanced Nvidia (NVDA) semiconductors through third parties in Singapore,

Officials in the White House and FBI have begun a probe into DeepSeek to determine whether banned NVIDIA chips were used to create the R1 model.

DeepSeek just shook up the artificial intelligence (AI) world in the biggest way since OpenAI launched ChatGPT in late 2022. The Chinese company's new R1 large language model (LLM) reportedly matches or beats OpenAI's o1 model on some benchmarks.

Nvidia called DeepSeek's R1 model "an excellent AI advancement," despite the Chinese startup's emergence causing the chip maker's stock price to plunge 17%.

While the demand is there, it's clear that's not the sole reason why Nvidia's RTX 50 series is impossible to find in stores. Many retailers received fairly low stock quantities, as Nvidia reportedly experienced manufacturing issues.

B AI model on its wafer-scale processor, delivering 57x faster speeds than GPU solutions and challenging Nvidia's AI chip dominance with U.S.-based inference processing.

Nvidia Corporation (NASDAQ: NVDA) announced that Chinas DeepSeek R1 AI model is now available as a preview on its enterprise software platform. Developers will soon gain access to its API, Nvidia confirmed in a

So, let's consider a few facts for a moment. Reuters reports that DeepSeek's development entailed 2,000 of Nvidia's H800 GPUs and a training budget of just $6 million, while CNBC claims that R1 "outperforms" the best LLMs from the likes of OpenAI and others.

Despite the negative financial impact, Nvidia praised DeepSeek’s breakthrough. “DeepSeek is an excellent A.I. advancement and a perfect example of test time scaling,” a company spokesperson told Observer in a statement.

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

Development on the first DeepSeek R1 clone might have started with the announcement of the Open-R1 open-source project.

DeepSeek R1 model was trained on NVIDIA H800 AI GPUs, while inferencing was done on Chinese made chips from Huawei, the new 910C AI chip.