DeepSeek Develops Custom AI Chip

DeepSeek is a Chinese artificial intelligence startup based in Hangzhou. In July 2026, it was linked to the development of a custom AI chip designed for inference workloads and for reducing dependence on foreign semiconductor technology.

AI Inference and AI Training

AI inference is the stage in which a trained model processes inputs and generates outputs such as text, images, or predictions. AI training is the process of building a model by using large datasets and high computational power, and it generally requires more advanced hardware than inference.

Chip Design and Manufacturing

The chip project began around July 2025 and remained in an early stage in 2026. DeepSeek has been recruiting chip-design engineers and discussing production with semiconductor foundries and memory companies. Semiconductor Manufacturing International Corporation, or SMIC, is China’s largest foundry. SMIC has been operating with a 7-nanometre process node, which is the most advanced node publicly linked to its production under current US and Dutch export controls.

Domestic Semiconductor Ecosystem

DeepSeek’s V4-Pro and V4-Flash models were released in April 2026 and were optimised for Huawei’s Ascend processors and other Chinese-made silicon. Huawei’s Ascend series is used in China’s domestic AI hardware ecosystem. US restrictions on advanced Nvidia chip sales to China have affected access to high-end AI accelerators. Export controls by the United States and the Netherlands have also shaped the availability of advanced semiconductor equipment and components in China.

Funding and Corporate Structure

DeepSeek has also been linked to its first external funding round. The proposed fundraising target was about 7 billion, with a reported valuation range of 52 billion to $59 billion.

Important Facts for Exams

• AI inference uses a trained model, while AI training creates the model.
• SMIC is China’s largest semiconductor foundry.
• Huawei’s Ascend processors are part of China’s domestic AI chip ecosystem.
• Hangzhou is a major technology hub in Zhejiang province, China.

Current Status

DeepSeek has not officially confirmed the chip development plan. The available information is linked to unnamed persons familiar with the matter.