“We’re Not Shipping Blackwells to China”: A DeepSeek Report Raises Fresh Export Risk for Nvidia (NVDA) Ahead of Earnings

2026-02-24 08:21:17

China’s DeepSeek may have trained its next AI model on Nvidia’s NVDA +0.91% ▲ most advanced chip, even though U.S. export rules ban those sales to China. That is the claim from a senior Trump administration official in a new Reuters report. In fact, the news report raises two key issues at once: the first points to very strong demand for Nvidia’s top chips, while the second adds fresh policy risk. Importantly, this report breaks a day before Nvidia reports its fourth-quarter earnings.

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According to the official, DeepSeek used Nvidia’s Blackwell chips to train a new model that could launch as soon as next week. The official said, “We’re not shipping Blackwells to China,” and added that the chips are likely clustered at a data center in Inner Mongolia. U.S. export controls currently bar Blackwell shipments to China. Nvidia declined to comment, and DeepSeek did not respond to Reuters.

At the same time, the official said DeepSeek may remove “technical indicators” that could reveal the use of U.S. chips. If confirmed, that would suggest the chips reached China through indirect channels. The report does not explain how the chips were obtained, and the U.S. government did not share details on how it gathered the information.

Meanwhile, NVDA shares rose nearly 1% on Monday, closing at $191.55.

Higher Demand, Higher Policy Risk

First, the report underlines how central Nvidia’s chips are to the global AI race. Blackwell is Nvidia’s most advanced AI chip, and it sits at the top of the company’s product line. If a Chinese AI firm is willing to take risks to access that chip, it shows how wide Nvidia’s lead may still be.

In fact, some policy voices argue that blocking all sales may push China to speed up its own chip effort. White House AI czar David Sacks and Nvidia Chief Executive Jensen Huang have said that selling advanced chips to China could slow rivals like Huawei. However, others take the opposite view. Chris McGuire, a former White House official, said, “This shows why exporting any AI chips to China is so dangerous.” He warned that Chinese firms may not follow U.S. limits meant to prevent military use.

For investors, this split matters. On one hand, the report suggests that Chinese AI firms still rely on Nvidia hardware for top-level training. On the other hand, it may push Washington to tighten rules even more. That could affect not only Blackwell but also other chips like the H200, Nvidia’s second-most-advanced product.

What It Means for the AI Chip Market

The report adds pressure to the ongoing debate over Nvidia’s H200 chip. President Donald Trump had allowed Chinese firms to buy certain advanced chips, then later pulled back on Blackwell sales. Meanwhile, shipments of H200 chips to China remain stalled over approval guardrails. After this report, regulators may take a harder line.

The official also said DeepSeek likely used a method known as distillation, where a newer model learns from stronger AI systems made by firms such as OpenAI, Alphabet’s Google GOOGL -1.11% ▼ , and Anthropic. That suggests that both top-level chips and access to leading AI models remain key inputs in the race.

For Advanced Micro Devices AMD -1.77% ▼ , the story has a similar meaning. AMD also sells AI chips that compete with Nvidia’s products. If U.S. policy tightens further, it could limit sales for all U.S. chip makers. At the same time, the report reinforces how strong global demand is for top-tier AI hardware.

Overall, the report does not accuse Nvidia of wrongdoing, and there is no sign that the company violated export rules. Still, the news could increase scrutiny on supply chains and overseas partners. In the near term, that may add stock volatility. Over the longer term, however, the report may confirm that Nvidia’s chips remain the core engine of the AI buildout, even in markets where access is restricted.

Is Nvidia Stock a Buy, Sell, or Hold?

On the Street, Nvidia has a Strong Buy consensus rating. The average NVDA stock price target is $265.07, implying a 38.38% upside from the current price.

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