Nvidia NASDAQ:NVDA shares slipped about 0.5% in premarket trading after a report said Chinese AI startup DeepSeek is developing its own artificial intelligence chip for inference workloads.
DeepSeek's chip project is aimed at inference, the process of generating responses from trained AI models, rather than training new models. The effort could reduce the company's reliance on Nvidia and Huawei hardware if development progresses. The project has reportedly been underway for about a year.
DeepSeek has held discussions with chip-design firms, foundries and memory suppliers while quietly expanding its semiconductor engineering team, the report said. A successful in-house chip could place DeepSeek among a growing number of AI companies designing proprietary hardware to support their computing needs.
The project, however, remains in its early stages and faces challenges. U.S. export controls continue to restrict Chinese access to advanced chip manufacturing and high-bandwidth memory, key components for AI inference processors. Those limitations could affect the timeline and competitiveness of DeepSeek's chip development.