Chinese AI startup DeepSeek is taking a very vital step beyond software by developing its own artificial intelligence chip, a move that could help the company reduce its reliance on foreign technology and strengthen China’s domestic AI ecosystem.
The company has been working on the project for about a year now, with the focus on designing an inference chip, a processor used to run AI models after they have been trained, Reuters reported.
While the initiative is still at an early stage, it reflects that DeepSeek’s broader ambition is to gain greater control over the technology powering its AI products.
The news agency also reported that three people familiar with the matter have reported that DeepSeek has been quietly assembling a chip-design team and collaborating with external semiconductor partners to advance the project.
The move comes at a time when AI companies around the world are increasingly looking to build custom chips instead of relying entirely on suppliers such as Nvidia. Owning both the software and the hardware can help companies improve performance, lower computing costs, and reduce dependence on third-party chipmakers.
For Chinese companies, the push has become even more urgent following US export restrictions that have limited access to Nvidia’s most advanced AI processors.
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While companies have increasingly turned to Huawei’s AI chips as an alternative, Reuters reported that several Chinese technology giants, including Alibaba and Baidu, are also investing heavily in their own semiconductor capabilities.
Despite the growing momentum, designing an AI chip is a difficult and expensive undertaking. Reuters also reported that DeepSeek could face challenges related to chip manufacturing as well as securing high-bandwidth memory (HBM), a critical component used in high-performance AI systems.
The report also said DeepSeek is preparing for its first external fundraising round.
The startup is reportedly seeking around $7 billion at a valuation of $52 billion to $59 billion, although the discussions are still ongoing.
The move comes at a time when AI companies around the world are increasingly looking to build custom chips instead of relying entirely on suppliers such as Nvidia.
Owning both the software and the hardware can help companies improve performance, lower computing costs and reduce dependence on third-party chipmakers.
Its decision to develop an in-house AI chip suggests DeepSeek is now looking beyond software and positioning itself as a more vertically integrated AI company—an approach that has also been adopted by several leading AI firms globally.
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