DeepSeek Teams With Huawei to Challenge Nvidia’s CUDA Moat

DeepSeek has primarily relied on Nvidia and Huawei chips to train and deploy its models. As the United States continues to restrict exports of advanced AI chips to China, inference costs and supply security have become increasingly important. An in-house chip optimized to run responses from existing models could reduce the company’s dependence on outside suppliers and potentially disrupt Huawei’s position in China’s AI computing market.

Reuters reported on July 7, 2026, citing three people familiar with the matter, that DeepSeek was hiring more semiconductor engineers and approaching chip design, foundry and memory companies. The project remains at an early stage, with no timetable for mass production. Reuters separately reported in June that the company planned to raise $7 billion in its first external funding round at a valuation of $52 billion to $59 billion.

Chinese AI startup DeepSeek has drawn attention for its low-cost large language models. Pre-release optimization across different chips directly affects inference performance and hardware adoption. Developers have typically provided models to Nvidia and AMD before launch, but DeepSeek’s reported shift toward Huawei could advance China’s efforts to reduce its reliance on advanced U.S. chips.

People familiar with the matter said DeepSeek did not give Nvidia or AMD access to a pre-release version of its flagship V4 model, instead prioritizing access for Chinese suppliers including Huawei. V4 is reportedly scheduled for release in late April, will support a one-million-token context window and could run on Huawei’s Ascend 950PR. Separate reports claim its cost is about one-hundredth that of GPT.