DeepSeek Orders 160,000 Huawei Chips for China Data Center

DeepSeek announced Wednesday that it will open-source software tools customized for Huawei's AI chips, marking an escalation in the Chinese AI firm's push to rely on domestic semiconductors for model training and deployment. The move includes a Huawei-compatible version of TileLang, a software framework. This effort reflects broader Chinese industry strategy to reduce dependence on foreign chip technology amid U.S. export restrictions.

DeepSeek is targeting completion of a $7.5 billion funding round by end-October as it prepares for a Shanghai Stock Exchange IPO. The Chinese AI company's fundraising push is supported by annualized revenue that has reached $1 billion. The timing suggests DeepSeek is accelerating its path to public markets while maintaining aggressive capital raising.

China's internet regulator is investigating DeepSeek and Moonshot AI following allegations by Anthropic that both companies routed sensitive user data to Claude models without authorization. Anthropic published a 154-page report on September 10 detailing how seven Chinese companies were using Claude illicitly at scale, including an example where DeepSeek relayed requests from engineers building a police surveillance system to Claude. The investigation marks a significant escalation in scrutiny of data practices among Chinese AI firms and raises questions about the security of proprietary AI systems.

DeepSeek CEO Liang Wenfeng told investors the company plans to increase use of domestic chips for AI model training, with Huawei expected to begin delivering training chips as early as Q4 2026. The move reflects a coordinated effort by both Chinese companies to circumvent U.S. export controls on advanced semiconductors. DeepSeek is simultaneously closing a second funding round targeting 50 billion yuan ($7.5 billion) at a 500 billion yuan valuation.